Forex in tweetsForex in tweets (first chapter of my on-coming book)

I am currently into a new venture (in addition to others in various degrees of progress). Write a simple guide to Foreign Exchange (Forex) with humor and in a chatty style – yes, what we employ for our Twitter micro blogging. ‘Forex in Tweets’. The first 48 tweets from the book are here –

Forex in tweets
——————
Have you leafed through the pages of this interesting book ‘Twitterature’? It is a Penguin publication (2009) written by two 19 year old students, Alexander Aciman and Emmett Rensin of University of Chicago. What is it all about? Well, literature in general and literature in particular – 61 of the world’s literary classics by great writers from Sophocles to Franz Kafkahave been retold in the twitter format – at the maximum 20 tweets for each book. The book is a roaring best seller.

If literature could be retold as tweets of maximum 140 characters (including spaces) in length each, why not banking?

Here is Forex for you – all in tweets (by @whatdhellforexyz aka Murugan Ramasami)

1) Have two hands? Wanna sell US dollars by right & buy equal Euros by left? Cool. That’s Forex trading. U arenow a Forex dealer. Only brokers n dealers trade. Othrs win, lose or teach Forex like me.

2) Currency never comes alone for trade. Always in pairs. EUR/USD, GBP/JPY. AUD/CAD, OMG/LOL. Ok, last one not a currency pair. U know others – u r already anointed a Forex trader, right?

3) When you buy, US $, in effect u r buying a share in US economy.Sounds gr8? Don’t expect Obama to pass on your share of federal revenue. No Nigerian mails, buddy. It doesn’t work that way.#Xtrabucks

4) Market cheers ‘fella rocks..at pink of health’ about an economy? Pinky ponky guy’s currency zooms up. That’s how US dollar always ends a rock fella!Bucket kickers’ currency turns toilet tissue. Sh.its fun?

5) Keep it simple jackass. Well, rate of exchange of a currency for any other currencyreflects on economies of both countries. Confused? Read that again to get more confused.ROFL.

6) Forex never sleeps, says d banker. U got to trade it 24 hours a day over d counter. Nothing under d counter, mind u.Crazy forex guys trade $2 trillion daily.How many zeros after 1, that is?

7) Forex more liquid than lager beer. More heady. Forex quite unlike shares and bonds. Ready cash always.

8) Shares can be sold only if u find a willing buyer. Can’t force mom-in-law to buy flop shares from u. Forex has ready takers even in Antarctica. US equity & treasury market tiny compared to Forex viswaroopam.

9) Until 2000, forex uppity n for up-class only. Only high net worth individuals to trade. Had to bring in minimum $1 million cash deposit backed by $5 million net worth. Show now open to commoners.

10) Feast eyes on Online trading platforms. 1000s of trades/min. Shed ur class inhibitions. Anyone can trade- thru a broker. Rub shoulders with Warren Buffet.Does Kate Winslet trade in Forex? Or Di Caprio?

11) Forex network winds like a giant jalebi. It’s a global electronic network of central banks, commercial banks, finance co.s, corporates, MFs, brokers traders, u, me, your boss -to buy & sell national currencies.

12) 90% of global Forex trade conducted in US $, British pounds, Euro, Japnese Yen, Swiss Francs,Canadian $& Australian $. Indian rupees joining d gang? Not now. We hv a symbol for currency & signs of chronic weakness.

13) Forex market follows d Sun. When Tokyo opens @9, it’s 7 PM y’day @NY & midnight in London. Tokyo closes when London @ 9 AM opens. When London closes @5, NY half-way-thru @noon.#keep_a_watch_onThis.

14) Multiple currency exchange rates prevail, being an OTC market. Rates depend on currency, place of trading, nature of txn& dealer. Money changers in Bangkok too smart. They can count upto 10.

15) London world’s good auld grandma metro & hence, d oldest exchange centre. Quote a currency’s price and no name dropping necessary. All except Prince Philip know it’s London quote rate#GodSaveQueen

16) After London,New York, Tokyo, Hong Kong & Singapore too prominent currency trade centres.Mumbai to join soon. Now they are busy conducting IPL auctions & discussing VidyaBalan’s new Hindi flick #english_chinglish

17) Forex center crown of glory status earned thru geo-specific economic factors of a city- balance of trade, industrial growth, presence of football stars &GDP growth. OK, footballers & God don’t belong here.

18) Political factors too determine VIP status 4 Forex trading – stability of Government,no impending wars, no terrorism, perception of d rulers. No, Vatican does not qualify. Pope can’t trade. Even the brand new one.

19) Also market psychology / sentiments based on logical / illogical view on geo-political, economic incidents make a Forex trade center super star. How about astrological/vaasthu factors?#ursdoubtfully

20) Time to tango with Forex txns.Tom deal settled txn day + 1. Say, u buy US $ today, pay rupees tomorrw n take delivery. B’cos, In God US trusts and others ‘ve to pay in cash. Same with all currency tom deals.

21) Forex Spot txns – txn day+ 2 daysdelivery in general. US Dollar, EURO &Ruble settlenext business day. Why does one want to buy Ruble unless he excommunicates himself to Siberia?#existentialists_at_work

22) U believe 2 months from now, Sun’ll rise in East &urson’ll give d car an annual wash. And it happens. Forex forward? Buyer & seller agree on xchnge rate 4 future date currency trade; no going back on agreement @future date, come what market rate then is#wada_karle_sajna

23) Forex swap? Give bald eagle, get kiwi today; 2 months from now, return kiwi, get bckbaldie. Agree on xchange rates 4 both trades in advance.No ornithologist stuff. US $ bald eagle;NZ Guilder kiwi. Forex traders are birds of same flock & swap merrily.

24) Forex Option? Pretty serious stuff. Gives u right to trade but no obligation to trade. Trade union at work? No buddy. Shall tell u how-d-stuff-works afterwards. Hell wth knowledge overload.

25) Forward Forex contract locks d rate at which u can buy or sell a currency at a future date. Except when u guess correct and get a dinosaur coming for dinner, d lock stands firm.

26) Don’t like d name? Call it ‘Forward outright’ or ‘outright forward currency transaction’. No thanks. Forward Forex easy to remember like Richard Parker.

27) In Forex Forward, buyer & seller obliged to perform their roles – buy or sell @ specified rate, @specified quantity & @specified future date. No contract transfers pls. Can cancel contract b4 due date n pay thru ur nose. It’d appear like Grand Canyon #warner_bothers

28) It takes two to tango or to enter into a forward Forex contract. Counterparties come with speculation currency exchange rate moves in their own favor. U hit a ton or he takes ur wicket!

29) Strange are ways of currency forward. No realism.Guys fix a notional amount. Reap a profit or suffer a loss based on currency fluctuation- for that amount. U wanna get out? Wait. Its easy like pealing a banana #monkey_stuff

30) U hv a forward forex to buy 1000 USD at Rs 55 per $ from Mr.CounterParty(Mr.CP) 2 months from now. Today 1 dollar spot exchanged @ Rs 53. Fast forward 2 months. We still exist to paytaxes #holdOn

31) 2 months from now, exchange rate Rs 60 per $. U rock. Ur friend buys dollar at Rs 60 & u get it at Rs 55 from CP. Contract dictates d rate, Counter Party acts. Tell him ‘better luck next time’.

32) Alternate story line? 2 months from now, open market sells dollar at Rs 50. No way. U hv to pay Rs 55 per $ to ur Counter Party. Contract is God. Pulling a long face?Better luck next time mate.

33) Notional amount?Well, u fix a million $ as contract amount exchanged for Rs. Calculate Rs.valueA on contract due date at market rate. Also value B at contract rate. If A less than B, pay B minus A to counterparty. Else collect A minus B from him. Going bananas? Blame it on Forex.

34) Official name for notional forex play? Non-deliverable forward (NDF) where counterparties settle difference between contracted NDF rate & d prevailing spot price or rate on an agreed notional amount.

35) NDFs prevalent in some countries where forward FX trading is banned along with idli, dosa and vada on Tuesdays.

36) A forward contract is a derivative- can’t stand on its own like a B’wood star aftr a b’day bash. Strong exchange rate behind it. Currency Options and swaps too birds of same feather. No ostrich here; all soar in Forex horizon.

37) More on currency options now. It is simple like spelling Czechoslovakia. Only, options hv come to stay; good old Czechoslo..OMG its gone!

38) An option is a contract written by a seller that conveys to buyerright but not the obligation. God created Call and Put options, bowing to market demands.

39) Call option- right to buy a particular asset @ particular price on or b4 a future date. And put?Right to sell a particular asset @ particular price on or b4 a future date#whatdHeavenIsIt?

40) Today xchange 1 USD=1.25 Euro; Euro may bcome weak next month-blame it on Cyprus.Xchange rate could be 1 USD = 1.50 Euro. Could be.Watch d word!

41) I sell you a call option-1 month from now I’ll sell you a put option for 1000 USD at 1 USD = 1.30 Euro. U now hv right to CALL me to deliver u next month 1000 USD. U will pay me 1300 euros while market exchanges 1 USD to 1.40 Euro. Smile like Mona Lisa. U win by a mile n half.

42) And if 1 month from now, market exchanges 1 USD to 1.25 Euro? Brave heart, u r not duty bound. Need not pay me 1.35 euro to get 1 USD.Trash d contract. I won’t take u to court. Lawyers on strike.

43) Call option gives u right to exercise contract but no obligation. Contract price 1 USD=1.30 Euro called Strike Price. U buy call option n u r risk free. I sell call option n I ve risk unlimited

44) How abt a different ball game? I sell u a put option – 1 month 1000 USD @ 1 USD = 1.35 Euro. U guessed it. Yes, u hv the right to put 1000 USD on ur table n command me to pay 1135 Euro next month when market pays only 1.03 Euro for 1 USD. U win hands down with put option too.

45) If 1 month frm now, market sells 1 USD = 1.40 Euro, u shred d put option n watch Django Unchained. U r not obliged to sell though u hv d right to sell at strike price.

46) Call or put, inreturn for granting doption, option seller collects a paymentfrom u. Call it premium. Amount depends on contract size, period and strike price.

47) Exchange traded options? They hv standard contract features ntrade on public exchanges like shares. Clearing Corporation provides settlement guarantee. Zero-risk.#SleepTight

48) Exotic options? Not what u get in Honalulu. Knock out, Knock in, basket..to name a few. Sample knock out – they perform a vanishing trick if market reaches a particular rate. Knock in-spring to life if market reaches a particular rate#FunWithForex