Foreign Exchange Market | ForexGen
The Forex market, also referred to as the "Foreign
Exchange " or "FX" market, is the largest financial market in the
world, with a daily average turnover of approximately US$1.5 trillion. In
comparison, the daily volume of the New York Stock Exchange is approximately
US$30 billion per day.
Until now, professional traders from major international commercial and
investment banks have dominated the Foreign Exchange market. Other market
participants range from large multinational corporations, global money
managers, registered dealers, international money brokers, and futures and
options traders, to private speculators.
There are three main reasons to participate in the Foreign Exchange market . One
is to facilitate an actual transaction, whereby international corporations
convert profits made in foreign currencies into their domestic currency.
Corporate treasurers and money managers also enter the Foreign Exchange market
in order to hedge against unwanted exposure to future price movements in the
currency market. The third and more popular reason is speculation for profit.
In fact, today it is estimated that less than 5% of all trading on the Foreign Exchange
market is actually facilitating a true commercial transaction.
