Experts' Corner

guru forex ask

The majority prove their worth by keeping busy. A busy life is the nearest thing to a purposeful life.

  • Talitha Taslim
  • Posted Articles: 13
  • Last Posted: 2017-08-03 08:59:33
    • Guru StarsGuru StarsGuru StarsGuru StarsGuru Stars

Investing in the Swiss Franc

2015-09-26 07:47:39

The Swiss has long been recognized one of the safe haven assets in the industry. In times of economic turmoil, traders can place their money in the currency, knowing it would withhold its value. The franc has become more popular because of its steady performance in the European crisis. A trader can gain exposure to the franc without actually purchasing the currency itself through the following financial instruments.


Binary Options


Known for its flexibility and simplicity, binary options have become a top choice for several investors in the forex market. Binary option traders only need to predict whether the franc will soar or plunge. Unlike the other major pairs, the USD/CHF is a less mercurial pair, which makes predicting its movement more difficult. It is important to monitor events that may affect the pair such as the monetary actions of the Federal Reserve and the Swiss National Bank, as well as economic reports like gross domestic product projections, industrial growth figures, unemployment data, and national debt. It will also be helpful to venture in other pairs before trading this pair and apply technical analysis backed by fundamental analysis.


Exchange-Traded Funds


CurrencyShares Franc Trust, formed in 2006, monitors the price of the Swiss franc to the US dollar. Access the Swiss markets via ETFs if you desire to seize short-term opportunities and long-term opportunities without holding a foreign exchange account. Same thing with investors. They can utilize their conventional brokerage accounts to obtain ETF shares. Traded on the NYSE Arca daily, the shares are considered regular securities with lower transaction rates.


Futures and Options



Many traders presume trading futures and stocks is only limited to stocks. Good thing the currency market offers these derivative products to retail traders, which manage the risks relative to currency rate fluctuation while profiting on changes in currency rates. Normally used by banks and financial institutions, both forex options trading and forex futures trading are well-known hedging techniques. Such products are traded at several exchanges worldwide, including the Chicago Mercantile Exchange, which introduced Swiss franc futures and Swiss franc options in 1972 and 1985, respectively.


Spot Market



The market, the avenue for trading different currencies, is open 24 hours a day and 5 days a week. Spot market also offers various currency pairs, including the USD/CHF. Investors can trade on a margin, enabling them to raise investment amounts without actually owning the capital. Bear in mind leverage works both ways when using margin, as it magnifies both gains and losses.


Based on a Bank of International Settlements data, the Swiss franc owns roughly 5% of foreign exchange transactions worldwide. The USD/CHF is the 6th most traded currency pair as of present. Having said that, traders can generate profit in the Swiss franc, attributing it to Switzerland’s progressive financial system and firm competitive economy.



Â