Forex is the short way to say foreign exchange. When someone uses this word, they’re talking about a global marketplace that allows people to trade currencies from various countries. Investors in this marketplace make money by selling and buying foreign currency as their value goes up or down.

Forex trading has become mainstream because it can potentially produce financial profits. However, getting started in the market isn’t easy. A forex trader must understand the market, know how to handle risk and have money to invest. Forex prop firms can sometimes make it easier to start trading on the foreign exchange market.

What is a Forex Prop Firm?

Forex prop firms are proprietary trading firms that provide funds to traders wanting to enter the forex market. Lack of funds is one thing that often prevents traders from entering the market. Prop firms remove that obstacle by making the funds available.

It’s like an arrangement between the firms and the traders. The firms provide a significant amount of capital for trading. In return, the traders earn money for themselves and the firm. Not all firms are the same, but most follow the same basic operation.

First, there’s the selection and training of the traders. Each firm has a selection process that helps them choose traders who are most likely to succeed. Selected traders must participate in training programs that help improve their knowledge and trading skills.

Secondly, after training is complete, traders receive funded trading accounts. The firms fund these accounts, and traders are allowed to trade with a specific amount of money.

Third, the traders split their earnings with the prop firm. There’s a predetermined profit-sharing agreement that all traders must sign. Different firms have different agreements, but it’s common for traders to receive 50% to 80% of the profits.

As a Trader, How Do You Benefit from a Firm?

It’s true that you can enter the world of Forex on your own without the help of a firm. However, the benefits of working with a firm often outweigh the risks of going it alone.

Perhaps most notable is the fact that the firm provides substantial funds. You get access to the firm’s money without continuously investing your own money. Because of this, you can possibly take larger positions and earn more profits.

Working with a firm also makes risk management easier. Generally, the firm provides tools and guidelines that help you minimize losses. Not only can this possibly help your profits, but you’ll also become a stronger trader.

The firm benefits from your success. So, it’s in the firm’s best interest to help you develop your trading skills. The training you receive from the firm can help you succeed faster than working without the firm.

Another benefit is that you can use a variety of trading strategies. You’re not limited to just one type of trading when you work with a prop firm. The strategy or strategies you choose depend on your strengths and weaknesses. You might want to try day trading, long-term investing, swing trading, or day trading.

There are Challenges Involved

Trading with a firm has several advantages, as mentioned above. However, there are some potential hurdles you must acknowledge.

When working with a firm, you must accept the profit-sharing agreement. In exchange for providing you with funds for trading, the firm expects a portion of your profits. This can reduce your earnings as opposed to if you were trading with your own money.

There’s also the expectation that you’ll perform well. Most firms have performance and profit targets that a trader must meet to maintain their account. Some traders might find this stressful.

However, the benefits of a firm generally outweigh the negatives. It depends on your goals for your career as a Forex trader.

Going with a firm is possibly the only way to enter the market for a trader with little to no funds. The firm’s funds, training, and risk management tools are valuable for any trader. However, it’s necessary to carefully review the conditions and terms of any firm you want to work with. With the right firm, you can potentially build a profitable career in forex trading.

1. Options Trading Hours

Options keyword 1: market forecasting are typically between 9:30 am-4:00 pm CST, Monday to Friday. However, for some stocks, an opening auction can happen anytime from 8:00 am-8:30 am CST. Furthermore, options trading hours on the last trading day of the month and all holidays can vary depending on how long the monthly options contract expires. To find out when your stock options have expiration dates and when they are traded, please visit your stock profile on Yahoo Finance or MSN Money. They offer a calendar that shows options expiries and trading hours for the past seven years. To trade options online, you need a stock account, which requires a brokerage account. A brokerage account is required to trade stocks on the NSE or NASDAQ market. Numerous brokers offer this service, but some also provide after-hours trading. Before opening an account with an OTC broker, check the day’s trading schedule and options expiries to ensure your option strategy is compatible with the service you seek.

2. Why Trade After Hours?

Trading after hours allows you to make far better profits than trading during regular hours. You can sometimes garner gains of as much as 30%-50% more than you would have earned during regular trading hours. In addition, you can gain additional profits by purchasing option spreads or straddles that have a higher payoff at expiration. For example, an ATM straddle involves purchasing an at-the-money call and put option with strike prices close to each other. Trading after hours offers you an excellent opportunity to put your profits to use. You can also follow specific strategies that require purchasing options that expire in the next few days or weeks. You can do this by trading during regular hours and buying in after hours. Just make sure you only trade options during after-hours trading hours. This will help ensure your account is kept from your brokerage firm, as it may happen every month for some stocks and or instruments. The brokerage is responsible for monitoring your account activity daily and freezing it when there are unusual patterns or large amounts of trading in the market.

3. What Isn’t Allowed After Hours?

After-hours does not allow you to trade in penny stocks, stock options that expire within five days, or supplies not listed on the NSE. There is also some variance in what is permissible when trading digital options. However, it is often best to stick with investments with precise expiration dates. Not only will this help you avoid paper cuts, but it also lets you hedge your position for higher profits in the future. It also restricted trading options on a stock with an expiry date within a few days of the current month. Since most brokers don’t allow you to trade options that expire within five days of the current month, it is always best to call your broker before placing any trades during after-hours trading. After-hours trading discourages the use of naked or short options trading. You can only trade extended options after hours, which is different from quick possibilities. When you open a temporary option position, you are allowed to sell the work immediately, as long as you are long at expiration. The same goes for naked parts. The use of naked options is strictly prohibited after hours and may get your account frozen if it is detected.

4. Is There A Difference Between Normal Hours and After Hours?

The difference between Normal Hours and Hours trading is that Hours trading typically offers better market prices because fewer traders are in the market. The volume of shares traded during regular trading hours is usually higher than after hours. The spreads are generally higher after hours, and you may only have a limited time frame to trade if you want to ensure you get all the expiration dates of your options. Regular Hours trading offers a wide variety of stocks and options you can choose from and have time to research. After-hours trading is usually more limited because the stores selected for after-hours are generally in demand or have opportunities to expire soon. There are some market forecasting exceptions to this, but most times, this will be the case. After Hours trading also tends to limit trades for you if your account needs to be bigger or your starting balance does not meet their minimum requirements. This does not happen during regular trading hours. After Hours trading also prevents you from trading stocks that have a large number of option contracts available for purchase. This is done to avoid a market crash from occurring in the stock market. You are also not allowed to trade options for stocks that do not have an expiry date, while in Normal Hours of selling, the option expiration date is listed when you place your order. You can only trade options before their expiration date during regular trading hours.

Trading after hours is a great way to make more money on options. You can double or triple your profits by using this strategy. You must only trade after hours because it prevents brokerage firms from freezing your account for a day or two if there are significant market trends or unusual trading patterns. In addition, trading in after hours means you will have the opportunity to put your profits to work and then sleep at night knowing that you will have access to more capital at any time. This also helps you avoid paying any extra dividends that may be delivered to owners of stocks during the next day’s trading session. You can put your money to work before it is even available. However, you need to make sure you are trading options with enough time left to avoid early exercise if the options become too expensive by the expiration date. This will help you lock in your profits and keep them in your account.

Since margin trade is an active short-term trading strategy, you can make quick bucks from the same. However, you need to be aware of a few things before undertaking a margin trade. We will throw light on the same in the successive paragraphs.

All you need to know about margin trades

1. Selecting an online broker

As per SEBI guidelines, online trading in India requires you to open Demat and trading accounts. For executing margin trades, you are required to open an additional account – the margin account. Your prospective broker must be authorized as per SEBI regulations to provide an MTF (Margin Trade Financing) facility. Plus, you also need to check the margin rates and the overall brokerage costs while evaluating a potential broker. The lower the margin rates and brokerage costs, the higher will be your potential gains.

2. Understanding margin trades

While opening a margin account, you have to deposit an upfront amount, known as initial margin (IM), in your account. The initial margin is a specified percentage of the total stock purchase value and is pre-determined by your broker. This initial margin can be paid in cash or kind – that is in the form of securities. In other words, you pledge your securities to borrow funds from your broker to finance stock market purchases.

On the day of margin trade execution, you may ensure a minimum margin (MM) amount in your account. The minimum margin is necessary for tackling rapid market fluctuations. Suppose, a stock priced at Rs 1000 decreases by 5.5%. The IM and MM are fixed at 9% and 5% respectively. In this case, your total trade-off equals 4.5% (9% – 5.5%), which is lesser than MM. In that case, you have to pay 0.5% to your broker to replenish the MM.

Moreover, you need to square off your position by the end of every trading session. In other words, if you have gone long, you need to sell. Conversely, if you have gone short, you need to buy. 

Lastly, you may convert every margin trade into a delivery trade. Thus, you need to have ready cash to pay the stock purchase price, brokerage charges, and all other applicable fees. 

If you fail to do any of the above, your broker will automatically square off your open positions.

1. Margin trade risks

Margin trades magnify both gains and losses. In other words, you may lose much more than you invested. Repaying borrowed funds to the broker is as binding as repaying traditional bank loans. Hence, you may tread with caution.

You must also ensure that your account always has the stipulated minimum balance. Any shortfall therein has to be replenished on time. Failure to do so will lead to the sale of your collateral securities by the broker to maintain the required minimum balance. Besides, your broker can also liquidate your pledged securities if you breach the margin trade agreement or do not respond to your broker’s margin calls on time.

Final words

Margin trades are profitable for seasoned investors who wish to take advantage of stock price volatilities with less cash in hand. It not only enhances your buying power but also gives you a much higher rate of return than regular investment strategies. 

You may go through SEBI’s pre-defined list of securities that are eligible for leveraged trades. Derivatives do not qualify for leveraged trading in India. Moreover, as per the recently adopted peak margin policy, SEBI has currently increased upfront margin requirements from 50% to 75%. This new system has been implemented to curb large-scale speculative trading practices.

Here are some looks to play around with: 

Lace and Chokers

Lace is a playful fabric that you can wear as accent or as the main outfit. There are lace shorts, tops, and dresses that you can buy from online shops. Some makeup artists even use lace to come up with creative patterns using cosmetic products online. With the fun and delicate patterns on lace, you can create ethereal elements on your makeup by using the item as a pattern. If you’re not that adventurous, don’t worry. You can still wear lace as is and it will still be as beautiful. You can also take it up a notch and add chokers for that dangerous edge to your outfit. Chokers used to be popular in the nineties, and they experienced a revival, making them fashionable again.

Playful Casuals

If you’re a fan of BTS and Stray Kids, you’ve probably seen their music videos for Go Go and Get Cool. Seventeen’s song Left and Right has the same vibe–a fun, you-only-live-once mindset that lets you take life easy and encourages you to just be yourself, no matter how kooky you feel. And that can show in your clothing as well. In their music videos, they’re seen wearing oversized outfits in all the colors of the rainbow, from bright oranges to neons and purples. If you’ve ever been afraid to wear these colors, you’re not alone. They tend to be loud and that makes them hard to wear, but if you’re going with the YOLO motto, why not try them out at least once? It’s even better if your hair is a bright color, so that you’re fully embodying the youthful theme of the songs.

The “Wet” Look

Fashion icons will always tell you they don’t leave the house with their hair wet and unkempt, but while it’s always good to look perfect, the wet look remains an iconic hairstyle because of the unbridled charm it shows. Unleash your sultry, devil-may-care attitude by wearing your hair in a slicked-back wet look and dressing up in a deep V neckline. It takes a level of confidence to pull this look off, and your hair will be the make or break element that pushes this fashion style forward. Anyone can wear revealing clothes, but not everyone can look effortless while still looking cool. If you’ve seen the darker concepts of your favorite k-pop groups, you’ll see the fierceness they channel when they’re on stage. Make that your peg and you’ll be slaying everything.

This 2021, say goodbye to your fashion fears. Let your favorite k-pop idols’ styles guide your playful and fierce personality out of the closet.