Spot forex is a type of currency trading that involves the exchange of two currencies ‘on the spot’ – immediately. The currencies are traded in pairs, with each pair consisting of a base currency and a quote currency. For example, the EUR/USD pair consists of the Euro as the base currency and the US Dollar as the quote currency. The spot forex market is decentralized, so there is no central exchange where trades take place. Instead, trades are executed over-the-counter (OTC) between two parties. OTC trading is done via electronic networks, phones, or other means of communication. Trading in the spot forex market takes place 24 hours a day, five days a week, since there are currency markets in all time zones around the world. As a result, when one market closes, another one opens, making spot forex a continuous and very liquid market. What is trading on the margin?
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