Non Marketable Securities in Forex Trading: A Guide

5 min read

Non-marketable securities, such as those traded in the foreign exchange (forex) market, are subject to different risks compared to traditional investments. These include foreign exchange risk, fiscal risk, political risk, liquidity risk, and counterparty risk. Foreign exchange risk relates to the potential for loss resulting from fluctuations in foreign currency rates. Fiscal risk refers to uncertainty related to the policies of different governments and their effect on the forex market. Political risk is the possibility that a government may take measures that disrupt or destabilize the forex market. Liquidity risk is the risk that a security cannot be converted to cash when needed. Counterparty risk is the risk that another party to the transaction may default on its obligations. Investors must understand these risks and take them into consideration when trading non-marketable securities.