June 30, 2022 - 12:08 PM 495 views
The stock market's organizational structure looks like this:
market is prone to being highly monopolistic by nature. Only one organization,
one expert, controls prices.
This expert must approve all trades. This makes it simple to change prices so that specialists instead than traders gain.
market professional is compelled to carry out its customers' orders. Now
imagine that the number of suppliers overtakes the number of consumers all of a
instance, the specialist, who is compelled to complete the order of his
clients, the sellers, is left with a large amount of stock that he is unable to
offload to the buyer side.
specialist will merely increase the spread or the transaction cost to
discourage sellers from entering the market in order to avoid this from
In order to meet its objectives, the experts can therefore modify the quotes they are providing.
Decentralized Spot FX Trading
have to use a centralized exchange like the New York Stock Exchange with a
single price, unlike when trading stocks or futures.
Because there is never a set price for a particular currency on the forex market, prices from different currency dealers differ.
first intimidating, this is what makes the currency market so incredible!
always receive the best deal because of the size of the market and the intense
rivalry amongst vendors. And who doesn't want it, please?
amazing feature of forex trading is that it can be done from any location. It's
comparable to exchanging rare purses or Jordans.
It is up to you to shop around for the finest deal if you want that Air Jordan 4 Retro Eminem Encore 2017 in pristine shape.
The FX market's participants can be arranged in a ladder. Here's a clear example to help you see what we mean:
interbank market is at the very top of the Forex Market(FX) market chain.
participants in this market, which is made up of the biggest banks in the
world, trade bilaterally or through voice or electronic brokers (such as EBS
Market and Reuters Matching).
between the two businesses, EBS and Reuters (now known as Refinitiv), is
comparable to that between Coke and Pepsi.
always competing with one another for market share and fighting for customers.
Although the majority of currency pairs are offered by both businesses, some
currency pairs are more liquid on one than the other.
liquid currency pairs on the EBS platform include EUR/USD, USD/JPY, EUR/JPY,
EUR/CHF, and USD/CHF.
EUR/GBP, USD/CAD, AUD/USD, and NZD/USD are more liquid currencies on the
every bank that participates in the interbank market is able to view the rates
that other banks are providing, this does not necessarily guarantee that any
agreements can be closed at those rates.
CREDIT connection between the trading parties will play a significant role in
determining the rates, just like in real life.
going to your neighbourhood bank to get a loan. The better the interest rates
and the bigger the loan you can acquire, the better your credit standing and
reputation with them.
Hedge funds, businesses, retail market makers, and retail ECNs are listed after these on the ladder.
institutions must conduct their transactions through commercial banks because
they do not have close credit ties with those who participate in the interbank
As a result,
their rates and costs are a little bit higher than those of the interbank
The retail dealers are at the very bottom of the ladder.
It used to
be quite difficult for us common folk to participate in the forex market, but
now that the internet, electronic trading, and retail brokers have all been
developed, these formidable hurdles to entry have all been eliminated.
us the opportunity to poke those who were up on the ladder with a very long,
Let's get to know the forex market (FX) players now that you are familiar with the forex market structure.
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