May 24, 2024

Defining Black Market

What is Forex Trading and What is its connection to Black market?  Most of us would usually hear or read about black market and most of us are also aware that Black Market is one of the markets where some forex traders would prefer to buy or sell their currencies.  Today,  let us take a look at this type of market based on a technical point of view. 

Technical Definition of Black Market

Black market is a place where risk loving forex traders would transact their business. We specifically highlighted the term “risk takers” because technically speaking,  black market transactions are considered illegal. Its illegal nature springs from the fact that most of the transactions are done without the knowledge and consent of a particular government. 

Why do people opt to transact via black market if it is illegal?

Despite being regarded as an illegal market,  some individuals take the risk of transacting on black market because of the following advantages:

1.Cheaper transactions

As a trader,  you are probably knowledgeable to the reality that most goods that are transacted via government accredited establishments are subjected to taxes.  Thus,  it can be understood that their products are more expensive compared to the ones that are processed via the black market. 

2.Easy Money

Since black market transactions are regarded as underground transactions, the people working under this type of market are usually given a one time big time payment since part of their job is to risk themselves from being caught by authorities.  Most of the time,  the individuals who are under the poverty line and underschooled are the ones who would most likely grab a black market job. 

3. Charity Work

Believe it or not but there are some black market runners whose intentions are decent.  Because of the fact that money moves fast with this type of market, the extra cash that is acquired by operators is donated to orphanages or care homes.  Sometimes they are also used to build infrastructures such as hospitals, schools or roads. 

Disadvantage of Black Market

The Black Market is regarded as an illegal market because of the following disadvantages:

1.Fraudulence and Scamming

The black market is an establishment that does not have legal documents to operate a business,  therefore, such a market could be a place where people would have a lot of opportunities to take advantage of your investments.Some establishments could use fraudulent identities just to take money from their victims. 

2. Counterfeit Currencies

Money Laundering business could be easily transacted in the black market because of its underground nature.  While it is true that most goods are sold at a lesser rate, buyers need to be careful towards scrutinizing the identity of the seller as well as the products being sold as they could be counterfeit. 

3.  Terrorism

This could be one of the worst disadvantages of black market.  Since the system does not involve government monitoring and supervision, traders can easily assume an identity and disguise as a black market trader but their main motive is to penetrate a country to execute a plotted terrorism attack. 


Considering the above listed advantages and disadvantages of black market,  it is really a must for an individual who is learning about “What is forex trading? “ to be aware of the nature of black market transactions in order to distinguish which among the many available transactions are legal and which are not legal.