NFA Membership & Associate Membership Requirements
Membership in NFA and CFTC registration are mandatory for futures commission merchants (FCMs), commodity trading advisors (CTAs), commodity pool operators (CPOs), floor brokers, and introducing brokers (IBs) working with customer accounts, as well as floor traders. The CFTC also requires associate membership in NFA and CFTC registration for most associated [...]
Author Archives: Butler
NFA Membership & Associate Membership Requirements
March 9, 2010 – 4:52 pm
Jurisdictional & Regulatory Framework
March 9, 2010 – 4:51 pm
Jurisdictional & Regulatory Framework
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Foreign Investment Indicators
March 9, 2010 – 4:50 pm
Foreign Investment Indicators
The forex market is sensitive to changes in the economy and will react accordingly. As the economy is affected by investment performance, the expected returns may change due to the influence of inflation or deflation. Thus, it’s important to consider foreign economy trends while planning investment strategies.
→ EXAMPLE:
Foreign Investment Indicators
The Business Cycle [...]
Economic Indicators
March 9, 2010 – 4:48 pm
Economic Indicators
Employment
Consumer Spending
Income
Industrial and Inflation Indicators
Balance of Trade
March 9, 2010 – 4:45 pm
Balance of Trade
The value of a country’s exports minus its imports. A nation’s balance of trade is favorable when the exports of goods exceed imports, and is said to be unfavorable if imports exceed exports.
Interbank Funds Transfers & Settlement System
March 9, 2010 – 4:44 pm
Interbank Funds Transfers & Settlement System
In the United States, payment and securities settlement systems consist of numerous financial intermediaries, financial services firms, and non-bank businesses that create, distribute, and process large-value payments. The bulk of the dollar value of these payments are processed electronically and are generally used to purchase, sell, or finance securities transactions; [...]
International Fisher Effect (IFE)
March 9, 2010 – 4:43 pm
International Fisher Effect (IFE)
An economic theory that states that an expected change in the current exchange rate between any two currencies is approximately equivalent to the difference between the two countries’ nominal interest rates for that time.
→ CALCULATE:
% change in the exchange rate =
(country A’s interest rate - country B’s interest rate)/(1 [...]
International Monetary Fund (IMF)
March 9, 2010 – 4:41 pm
International Monetary Fund (IMF)
The IMF promotes international monetary cooperation and exchange rate stability, facilitates the balanced growth of international trade, and provides resources to help members in balance of payments difficulties or to assist with poverty reduction.
Through its economic surveillance, the IMF keeps track of the economic health of its member countries, alerting them to [...]
Portfolio Balance
March 9, 2010 – 4:39 pm
Portfolio Balance
One of the problems stock investors have is losing their balance in an investment portfolio spread. This balancing problem can occur in a rising market or in a falling market. The balance is the ratio in your portfolio of stocks, bonds and cash. Investors should have a ratio in mind (some leave out cash) [...]
Role of Central Banks
March 9, 2010 – 4:39 pm
Role of Central Banks
The role of central banks in microfinance is related to their broader role in the financial system and in the economy more generally.
Central banks have a number of objectives:
tactical or macroeconomic objectives (relating primarily to the domestic price level and the exchange rate);
long-term strategic objectives of financial sector development (including the development [...]
Central Bank Activities
March 9, 2010 – 4:36 pm
Central Bank Activities
A central bank, reserve bank, or monetary authority is the entity responsible for the monetary policy of a country or of a group of member states. It is a bank that can lend money to other banks in times of need. Its primary responsibility is to maintain the stability of the national currency [...]
Theory of Elasticities
March 9, 2010 – 4:33 pm
Theory of Elasticities
The theory of elasticities holds that the exchange rate is simply the price of foreign exchange that maintains the balance of payments in equilibrium. In other words, the degree to which the exchange rate responds to a change in the trade balance depends entirely on the elasticity of demand to a change in [...]
World Trade Organization
March 9, 2010 – 4:31 pm
World Trade Organization
The World Trade Organization (WTO) is an international organization designed by its founders to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakesh Agreement, succeeding the 1947 General Agreement on Tariffs and Trade (GATT).
The World Trade Organization deals with regulation of trade between participating countries; it [...]
Gross National Product (GNP)
March 4, 2010 – 12:40 pm
Gross National Product (GNP)
The market value of all goods and services produced by US residents in the US or abroad (i.e. regardless of where they were produced) over a period of time (typically a year).
Study Guide >> Forex Market Concepts >> Gross National Product (GNP)