What's better to invest in: stock, crypto, or forex market? - https ://www.ig.com

Investing in the forex market: volatility and correlation

Forex markets can carry a moderate amount of volatility, and thus potential risk/return to investors, similar to stock markets. Given a Euro Currency Volatility Index (EVZ) price of 8.1,‡ investors can project the forex market benchmark EUR/USD to move in a +/-8.1% range over the next year with about 68.3% likelihood.

While other major pairs such as GBP/USD or USD/JPY can move more or less than EUR/USD, they only tend to do so by a few percentage points. Also, the forex market has been largely uncorrelated to the stock market in last decade, which can result in diversification for those investing in the stock and forex market.

Margin requirements

Most crypto and stock markets require 50-100% in margin, which means that investors must pay $50-100 for every $100 worth of crypto or stock investment. Forex markets can require less margin given their less volatile nature, and this reduced margin requirement may produce gains or losses exceeding the margin amount. For example, the margin requirement for EUR/USD is just 2% at IG US currently, translating to just $2 for every $100 in EUR/USD investment.**

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2023-04-25 16:14:10Z
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