Behind the Buzz
(MONEY Magazine) – THIS MONTH: Online currency trading
• WHAT IT IS Trading the dollar, the euro, the yen and other major world currencies in the foreign exchange market through websites such as FOREX.com and FXCM.com
• THE BUZZ Looking for a way to make money off a weakening greenback? Or maybe you're nostalgic for the excitement you once felt day-trading Pets.com? You've come to the right place, suggest the ads for these sites. The 24-hour Forex market has plenty of action. With 100-to-1 leverage—$1,000 up front gives you a $100,000 position—you can reap big profits from tiny shifts in value between currencies.
• THE TRUTH You can lose big too. Just ask Warren Buffett—a pretty shrewd investor, no? He lost nearly $1 billion in 2005 by betting the dollar would drop. "It's gambling, really," admits Forex hobbyist Rich Paredes, 32, of Wood-Ridge, N.J., who once lost $2,000 in less than a minute. A safer way to hedge against the dollar: foreign stock and bond funds.
Absolutely Not quite [√] Only if all the flights to Vegas are booked
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