Types of foreign exchange market:
The FX market or the forex market is popularly known for its worldwide network of currency traders. The market is always active and works around the clock in order to complete the transactions.
The quickest transactions in the foreign exchange market are known as the spot market. In this transaction, the receipt and payment are paid immediately. This is also known as the spot rate. In terms of spot market, the trades usually take place within two days of the agreement.
As the name suggests, the transaction in this market involves future payment and future delivery at an agreed exchange rate, which is also known as the future rate. Out of the equation it takes the volatility of the currency market. The future market has gained its popularity among those traders who trade with large currency transaction and find steady returns on their investment.
The forward market is similar to the future market except one difference. Unlike the future market, here in the forward market the terms are negotiable between two parties. As the terms can be negotiable, it allows more flexibility than the future market.