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Tuesday, February 15, 2011

Forex is (part 2)

Market capitalization and liquidity Foreign exchange market is a unique market because:
* The volume of trade
* Very big market liquidity
* The number and variety of traders in the foreign exchange market

        * Geographical distribution
* Trading period of 24 hours a day (except weekends)
* A variety of factors that affect currency exchange rates
According to BIS, the average turnover of foreign exchange markets in the world per day are estimated worth $ 3.21 trillion, which consists of:
* $ 1,005 billion in spot transactions
* $ 362 billion in market and transfer contract (forward contract)
* $ 1,714 billion in swap market
* $ 129 billion estimated as the difference in reporting
As an extra rotation of the "traditional" is, amounted to $ 2.1 trillion traded in the derivatives market.
Foreign exchange forward contracts which were introduced in 1972 on the Chicago Mercantile Exchange grew rapidly in recent years but the volume is still only 7% of the total trade volume of foreign exchange market.
According to data from the International Financial Services, London (IFSL), overall daily turnover of traditional foreign exchange market would average 2.7 billiun total value of U.S. dollar in April 2006. Such estimates are based on mid-year data from the Committee of Foreign Exchange (Foreign Exchange Committee) in London, New York, Tokyo and Singapore.
On direct foreign exchange trading (OTC, brokers and traders to negotiate directly without going through the exchange or clearing. Geographically the largest trading center in London, England, where according to IFSL data is estimated to have increased its contribution from 31.3% in April 2004 to 32.4% in April 2006.

source: forex II

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