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Handle

Updated on October 17, 2020 , 9 views

Defining Handle

This one is referred to the whole number part of the price quote, which is the part of the quote that is toward the left of the decimal point. For instance, if the price quote for a certain stock is Rs. 56.25, the handle will be Rs. 56; eliminating the value that is towards the right side in the quote.

Handle

Often, handles are used in equities and futures market where they are generally known as big fig or big figure. In the markets of foreign exchange, these handles demonstrate the part of the price quote that has appeared in both the offer and the bid for the currency.

For instance, in case the EUR/USD currency pair gets a bid of 1.4183 and the ask of 1.4185; then the handle here will be 1.41 – the quote’s part that is basically equal to both the ask and the bid.

Explaining Handles

Often, traders refer to the handle of the price quote because it is conceived that other market participants would be familiar with the quote’s stem. For instance, if S&P 500 futures trade at Rs. 2885.43, the handle could be simply 2885; or shortened to 85 handles. However, in case the price decreases to Rs. 2875.90; the trader could notify that the index dropped ten handles.

In the markets of foreign exchange, the minimum price movement is known as the pip. Because several foreign exchange instruments get quoted out four or five decimal places, it is regarded seamless to refer to the last two places while discussing the asks and bids instead of including the handle, which is apparently known by participants.

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Foreign Exchange Markets and Handles

Foreign exchange comprises a massive range of transactions, from a traveller converting current at a station to an international payment worth billion made by an organization or a government. Certain examples here could be the financing of exports and imports and the speculative investments that have no underlying services or goods.

Increasing globalization is corresponding with a substantial uptick in the foreign exchange transaction numbers. Among the expansive global foreign exchange market, forward markets and spot markets are extremely relevant for the handle.

Basically, spot markets are the ones that are specifically for financial instruments like securities and commodities that can be immediately traded on the spot. Also, these markets are also dependent upon the current market prices or spot prices. This is in contrast with forwards market that works only with prices at a later date.

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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