Foreign exchange is produced with international trade, and foreign exchange trading is a tool for internationalizing creditor's rights and debts. However, in the past ten years, foreign exchange transactions have doubled and have undergone significant changes in substance. Foreign exchange trading is a tool of international trade and has become the most crucial financial commodity globally. The types of foreign exchange transactions have also become increasingly diversified as the nature of foreign exchange transactions changes.
Foreign exchange transactions can be divided into cash, spot, contract spot, futures, options, and forward transactions. Specifically, cash transactions are transactions between tourists and those who need foreign exchange cash for various other purposes, including money, foreign exchange traveler’s checks, etc.; spot transactions are between large banks and large banks acting on behalf of large customers. After the transaction is concluded, the payment and delivery of funds shall be completed within two business days at the latest; contract spot trading is a way for investors to sign a contract with a financial company to buy and sell foreign exchange, which is suitable for public investment; futures trading is based on The agreed time, and the transaction is conducted at a determined exchange rate. The amount of each contract is fixed; an option transaction is a transaction carried out in advance for the option of buying or selling a particular currency in the future; a forward transaction is an agreement by the contract. The delivery is handled on the date, the contract can be large or small, and the delivery period is more flexible.
From the perspective of the number of foreign exchange transactions, the proportion of foreign exchange transactions arising from international trade in the total foreign exchange transactions is constantly decreasing. According to statistics, the current balance is only about 1%. So, it can be said that the mainstream of foreign exchange transactions is an investment, which aims to make profits from the fluctuation of foreign exchange prices. Therefore, spot, contract spot, and futures transactions account for a more significant proportion of foreign exchange transactions.