Direct from the desk of Dane Williams.
This morning, I had the pleasure of picking up my parents from the airport…
Okay, real talk, it was a fucking nightmare.
That’s a story for another day but it did give me a fun topic to chat about on my INLEO blog today.
As I walked through the airport entrance, I strolled past the currency exchange kiosk and couldn't help but have a chuckle to myself.
Seriously, if I told you the prices that they are offering those suckers who left their currency exchange to the last minute, you wouldn’t even believe me.
So stick with me and let's have a quick chat about airport currency exchange kiosks.
As a forex trader myself, I’d like to think I understand the inner workings of a retail trader’s mindset and how they view these kiosks.
With price boards which can seem like another universe when compared to our MT4 trading platforms.
When forex traders encounter an airport currency exchange kiosk with a 500+ pip spread, all we can do is laugh.
Why?
Because real traders comprehend the unreal markups on being placed on trades by the exchange owner.
Now of course these kiosks serve a completely different purpose compared to the retail trading platforms like MT4 that we’re accustomed to.
In our world, traders have the advantage of trading on leverage, where small movements in exchange rates can result in significant profits or losses.
It's a fast-paced arena where strategy, timing and risk management play a crucial role in whether you’re gonna make it.
However, you’re not going to be able to instantly withdraw a handful of Japanese Yen banknotes from your laptop either.
Airport kiosks provide a highly valuable service.
Can you put a price on convenience?
Well with their mark-ups, airport currency exchange kiosks certainly try!
They offer travellers a last minute, simple way to exchange your home currency for the local currency of wherever you’re headed.
Allowing you to have cash on hand for immediate use.
It's all about convenience for travellers who might need cash to cover small expenses upon arrival.
Think things like a taxi to the hotel at 2am when you land, or that quick meal before bed.
For us as forex traders though, these airport kiosks are a bit of a paradox.
On one hand, we can obviously appreciate the convenience these kiosks offer, especially when travelling.
It's reassuring to have local currency at the ready.
But on the other hand, our day to day battle with forex brokers also makes us acutely aware of just how much convenience costs.
Would we ever accept a 500 pip spread in our own trading endeavours?
No fucking way!
But all that matters is that people are willing to pay those prices for convenience because if they weren’t, the kiosks would go out of business.
Summarising again, the relationship between us as forex traders and airport currency exchange kiosks is a complex one.
While we may appreciate the convenience of these kiosks for small transactions, we also acknowledge the less favourable exchange rates.
Dud rates which we would never trade on if our broker provided them on our platforms.
But rates we’re happy to pay when we have no other option to get holiday cash at the last minute!
Best of probabilities to you.
Posted Using InLeo Alpha
It really depends on what people want but I guess it does hurt to see the markup. I guess we can't really blame them. Is it better to go to a bank in your own country and change currency first instead of going to the kiosks?
It may be a good option for some "sometimes" but you certainly won't have to if you have exchanged money before.