5 advantages and disadvantages of buying currency on the exchange

  • 16.8.2022
  • Written by Vladyslava Rykova
  • Category: Business

It’s no secret that buying currency on currency exchanges will be more profitable than in a bank or any of the exchange offices. But any transaction has its advantages and disadvantages. Let’s consider all aspects in more detail.


Disadvantages of buying currency on the stock exchange

One of the important drawbacks of working on the stock exchange, as in any operations in the Internet space, is data security issues. Virus activity and hacker attacks are an actual problem of the digital age. To ensure a secure connection and resist cybercriminals, you need to carefully consider the anti-virus protection of your computer or mobile device. To do this, you need to purchase a licensed anti-virus software package with good technical support and a regularly updated up-to-date database. Another nuance is the creation of complex passwords and their safety in order to avoid data loss or accidental transfer to third parties who can use them in bad faith.

The second drawback of buying currency on the stock exchange is the need to master the program for online trading in the foreign exchange market. This is not very difficult, but it will take some effort and time to figure out and understand the algorithm of the necessary actions and learn the necessary terminology.

Another disadvantage is some loss of time required to conclude an agreement with a broker for service, for depositing and withdrawing earned funds to a bank account, and even for buying or selling on the stock exchange using a special program.

It should be understood that the initial and one-time (not required in the future) conclusion of the contract may take up to three days. Funds are credited to a brokerage account, unlike a bank account, where the deposit is instantaneous, usually carried out within one or a couple of days. The purchase of currency occurs instantly, but the withdrawal of funds is another loss of one or two days. What can not be said about the currency exchange office from the Kit Group company in Kyiv https://obmenka24.kiev.ua/, where everything happens almost instantly.

A point that many beginners need to know, which is not well covered, but is very important. The fact is that the desire to cash out the currency that was received by bank transfer to a bank account may not be immediately. Depending on the policy of a particular bank, cashing out can take up to one month. The only consolation is that cash dollars https://obmenka24.kiev.ua/usd-uah, euros or zlotys – https://obmenka24.kiev.ua/pln-uah in the form of cash in ordinary life are not required very often.

Be prepared to face such seemingly ideal and profitable investment options that will come from the broker in an endless stream. Before investing and using new tools you haven’t explored, take the time to study all the offers. At first, it is recommended to use a brokerage account only for making purchase and sale transactions, while simultaneously exploring new opportunities.

The activity of your broker is due only to his commission, which he receives from each transaction. He may promise the maximum return on investing in 100% deals and options, but you should not take his word for it. His income depends directly on the number of transactions, and not on their quality or profitability.

Do not forget that all currency transactions on the stock exchanges are closely monitored by the tax authorities and are absolutely transparent to them. So get ready to answer questions about income that you need to declare and give explanations about the origin of your money and its profitability. Therefore, declare and pay taxes on time.

Advantages of buying currency on the exchange

One of the most important advantages, undoubtedly, is the most favorable buying and selling rate of a currency with the lowest possible delta or spread, that is, the difference between the buying and selling rates of any currency. After all, one should not forget that any bank exists only due to the fact that it earns from its customers, and sometimes quite a lot. Indeed, regardless of the purpose for which you applied there – to buy or sell, in any case, you will be offered a rate that differs significantly from the real exchange rate, by at least 10-15% not in favor of the client. And in moments of crises and speculative exchange rate fluctuations, taking advantage of the panic of the population and its illiteracy, banks can set spreads up to 40%, on which they profit significantly.

Another positive point is the possibility of buying foreign currency without crossing the threshold of the house, sitting on the couch. You won’t have to stand in line, especially during moments of excitement and panic of the population caused by the volatility of the exchange rate.

On the stock exchange, unlike a bank or an exchanger, you will never hear that the availability of currency is limited or it has ended altogether.

The advantage is also the ability to quickly buy currency and earn a considerable amount of money on the course fluctuations during periods of economic instability, which have become more frequent lately, and sometimes you need to react instantly. Today’s unstable hryvnia exchange rate has already taught many that daily exchange rate fluctuations, which can reach 15% in one day, can make good money. And in case of force majeure, exchange rate fluctuations will be significantly higher. Therefore, prompt actions to buy or sell currency have a lot of advantages, since you do not need to waste precious time on the road to the nearest exchange office.

Remote transactions on the exchange eliminates the risk of being robbed. After all, large amounts of cash are a tasty bait for unscrupulous people. After all, in a crisis, unemployment, lower wages, the level of poverty is growing and the number of cases of a criminal nature is increasing. It will also eliminate the risk of acquiring counterfeit banknotes or dilapidated banknotes. Recently, banks have been sinning by giving their customers shabby and crumpled banknotes, which later, if there is a need to sell, they will accept only when paying a commission, which, by the way, can neutralize all possible profits when selling at the rate. The exchange will relieve such risks and negative consequences.

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Vladyslava Rykova

Expert in legal marketing. Head of marketing agency MAVR.

Business degree “Master of Business Administration” (MBA).

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