2006-10-23 09:50:29 · 5 answers · asked by sara s 1 in Business & Finance ➔ Small Business
A currency exchange makes money by charging its members (brokers and dealers) a membership fee. Members, in turn, charge fees to their customers for executing transactions on their behalf...
As to whether it is worth trying to open one, probably not. What do you have that CME and LIFFE don't?
2006-10-23 09:55:05 · answer #1 · answered by NC 7 · 0⤊ 0⤋
Lets say i go to you and want to exchange my 1 dollar US into Canadian. You give me 1.09, while you can get 1.10 from another bank since you exchange larger amounts etc. I forget the guy's name but some billionaire recently made over a billion dollars in one week by just doing the above but on a very large scale. You have to be real careful when it comes to changing money in less developed countries as their rates can fluctuate wildly. As with most businesses, location is paramount. My father's friend opened an exchange at the Windsor Train station and he does very well, as there are alot of foreign travellers always there. So besides LOCATION, business contacts are important, because if you can a rate 1/1000 better than the market rate, you can make money.
2006-10-23 17:10:11 · answer #2 · answered by Johnny T 2 · 0⤊ 0⤋
A currency exchange makes money two ways. They may charge a commission and they sell for a higher price than they buy. It is a gamble since at the end of the day you may have a large amount of one specific currency and the market value drops the next day. On the other hand it may rise the next day.
2006-10-23 16:55:30 · answer #3 · answered by Barkley Hound 7 · 0⤊ 0⤋
It's very risky. If you've never tried it before, maybe you should open a practice account first. Just to give yourself an idea of how it works and how you'll do.
2006-10-23 16:55:28 · answer #4 · answered by cdaley79 2 · 0⤊ 0⤋
They charge a commision on each transaction.
2006-10-23 16:52:08 · answer #5 · answered by andalucia 3 · 0⤊ 0⤋