One:Monetary market speculation
Speculating in the Monetary market is an inherently risky endeavor. That being said, substantial profits can also be made.
Unless currency or gold is needed immediately, it is better to sell rather than buy. This is because exchange rates fluctuate, and you hold a large amount of an unfavorable currency, there may never be a way out without loss.
In order to see the recommended exchange rates for a certain currency, make, then immediately remove, an offer for that currency. This opens an "account" for that currency, allowing you to see the exchange rate.
Scalping or Double Sell Method
The standard method used most in speculation. A profit is made from the difference in the Bid/Ask prices of the exchanges.
The speculator puts up two offers in the currency market:
- Selling 1 GOLD for 100 FRF/GOLD
- Selling 100 FRF for 0.014 GOLD/FRF
If both offers are successful, the speculator would have ended up with an extra 0.4 GOLD.
The risk for this method comes in between the two sales. Market conditions may decrease profit or even result in a loss.
Double Buy Method
In the Double Buy Method either currency or gold is being sold at less than what it can be purchased at; this almost always indicates that the seller made a mistake (instead of selling, he should have purchased, or sold at a higher price).
- Person A (not you) is selling 100 USD at a rate of 0.02 GOLD/USD
- Person B (not you) is selling 1 GOLD at a rate of 40 USD/GOLD
Buying USD from Person A gives a rate of 50 USD/GOLD. Because Person B is selling at less than that, profit can be made from the difference in the rates by buying GOLD from Person B and trading it for USD purchased from Person A.
The beauty of the Double Buy Method is that the undervalued offering can be repeatedly purchased using the proceeds of the purchase until it is gone. Anyone who has even a little money can take advantage of this. In this example, they can simply purchase gold from person B, then immediately purchase USD from person A, then use the USD to purchase gold again from person B until the offer is down.
This is an essentially risk free form of investing. As such, such occurrences are rare, as speculators roaming the monetary market tend to discover them and clear out the offer very quickly.
This method, combines some of the risk associated with the Double Sell method with the devaluing used in the Double Buy method. It is useful when, in order to profit, the devalued item must be re-sold rather than used in a purchase.
- USD is selling at a rate of 0.02 GOLD/USD
- Person A is selling USD at a rate of 1 FRF/USD
- FRF is selling at a rate of 0.016 GOLD/FRF
In this case FRF is purchased with gold, then used to purchase USD, and then resold for a profit. Such offers stem from a change in market conditions while the seller wasn't looking (USD may have been selling at 0.014 GOLD/USD earlier).