The Assets of FOREX
The FOREX or foreign exchange currency is everywhere where currency is being traded for another one. Forex is the largest market there is in the world. The cash value being traded everyday in the world includes the trading that occurs between large banks, the central banks of the world, the speculators of currency and of course the big multinational companies, the governments of the countries as well as financial institutions and markets. Today the trade that is happening in the foreign exchange market is estimated to average at $1.9 trillion daily. There are retail traders and they are the smallest part of the forex, participating indirectly by brokerage or through the large banks. The retail traders however, are usually the targets of scams.
In the published Financial Times website last October 9,2006. David Krutz stated that in more or less three years, the foreign exchange market will double its'size. There will be an increased participation by the pension funds and the fund managers, says the said published research. A financial services consultancy, TowerGroup, stated that the expected average daily volumes in total for the global foreign exchange market will exceed $3,000 billion in 2007. Foreign Exchange volumes already rose from $1,770 billion in 2004 to $2,000 billion in 2005. By the end of 2006, this volume is set to rise to $2,600 billion and $3,600 billion next year. This will lead to the acceptance of foreign exchange as an asset totally having a right of its own according to the said financial consultancy.
THE TOP TRADERS The top 10 Currency traders: 1. Deutsche Bank 6. Merrill Lynch 2. UBS 7. J.P. Morgan Chase 3. Citigroup 8. Goldman Sachs 4. HSBC 9. ABN AMRO 5. Barclays 10. Morgan Stanley
In 1972 the contracts called Exchange-traded forex futures were then introduced. It was first introduced in the Chicago Mercantile Exchange. Throughout the years the Forex futures volume grew rapidly but this actually covers only 7 percent of the total forex market volume. This report was based on THE Wall Street Journal of Europe published in the May 5th 2006 issue. The ten top traders mentioned above accounts for 73% of today's trading volume, based on the report from The Wall Street Journal Europe of the February 9th ,2006 issue found on page 20. The multinational banks operate internationally to provide the worldwide market with buying and selling prices.
The bidding and asking of the prices is the difference that divides the price at which a market maker or bank will offer or ask and also the price at which the market-maker will bid from one customer who intends to buy wholesale. There is minimal spread activity for traded pairs of currency that are being actively traded. We can cite the bidding and asking quotation of EUR to USD which for example might be 1.2200/1.2203 but the minimum size for trading of most deals is commonly $100,000.00