Stock trading and Forex Trading are two different types of trade and it has many differences. But these two types of trades are part of financial market that can influence each other’s. Foreign Exchange or Forex is trading business of nation currency. Then, stocks trading is business of buy and sell stocks.
In this article we will explain to you the differences between Stock trading and Forex Trading. It contains with some points like stock exchanges, OTC, Capital of Stock and Forex Trading, open operation, and dividens.
OTC and Stock Exchanges
Forex trading is mostly done over the counter (OTC) or a direct deal between two parties who make a sale. While, Stock trading is generally carried out with stock exchange supervision. The connotation, stock trading is more standardized than forex trading.
For example, the stocks broker must take an exam to have a stock broker certification. Only certified brokers can contribute to buying and selling shares in the Indonesian capital market. Whereas a best forex broker does not have to get such official permission to participate in forex trading but hey have to regulated by any regulatory authority in the country.
Capital of Stock Trading and Forex Trading
The next differences of Stock trading and Forex Trading is capital. The capital in stock trading is greater than the capital if you want to start Foreign Exchange or Forex. In stock trading, you have to buy stocks in order to sell them, and the prices is not small.
You must have a hundred of Dollar if you want to buy Stocks. But in Forex trading, you can sell currency pairs even without buying them, but you can “buy” money in Forex with notes in good timing. For example, you buy JPY yen because the value is down, and you can sell that Yen JPY if the value is high on top.
The Market Open Time
Foreign exchange or Forex has a different characteristic with Stock Trading in market open time. Forex trading has 24 hours global market, and open 5 days a week. Forex market also spread all around this world.
Stocks trading can only be traded at certain times according to the opening hours of the exchange. On the Indonesia Stock Exchange, for example, it is only as follows: Monday-Thursday at 09.00-12.00 (session 1) and 13.00-16.00 (session 2) Friday 09.00-11.30 (session 1) and 14.00-16.00 (session 2) Outside these times, there are pre-closures until 16:15 as well as certain other times, but it can still be said that trading time is limited.
Capital Gain and Dividens
There are two types of profit from trading stocks, namely capital gains and dividends. Capital gain is the difference between the price of a stock when buying and the stock price when selling, it's similar to the difference in price which is the advantage of forex trading.
But in addition to capital gains, stocks also have benefits in the form of dividends that would not exist in forex. Dividend is the distribution of earnings per share distributed by the issuing company. There are stock traders who aim to get capital gains, but there are also those who want to pay dividends.
This different objective is one that distinguishes the character of investors in the stock market and investors in the forex market. You can get these kinds of information if you join DIDIMAX. You have to choose DIDIMAX as your broker because DIDIMAX’s forex broker is the best broker right now.
In conclude we can see that; Forex use OTC and stocks use Stock Exchanges. Then, the different capital of Stock and Forex trading, next is Market open time and capital gain and dividens are the differences between Stock trading and Forex trading.