A look at the Forex Market Makers

A look at the Forex Market Makers

The investor in the currency market for granted that a pair of currencies can be bought or sold a moment's notice. Once the order is put through, the trade takes place within seconds. It is, of course, not as easy as that.

Whenever a pair of currencies is bought or sold, there must be someone at the other end of the transaction. It is likely that the investor will always find someone who is interested in buying and selling the same two currencies at the same amount, and at the same time. Hence, the question remains: "How is it possible that the forex investor can buy or sell at any time?" This is where the forex market makers come in.

The Forex market maker is a bank or brokerage company that stands ready, every second day of trading with a firm bid and ask price. This is good for the investor because when the investor decides to buy and sell a currency pair market maker will buy from and sell to an investor, even if they do not have a buyer and seller lined up. In addition, they are literally "making a market for currencies.

Forex market makers ensure that the market is always functional and that the currencies in it will always fetch the market rate. Forex market makers do so by updating their prices at intervals of at least 30 seconds and undertaking to trade if it is required. Forex market makers must fulfill their obligations, regardless of whether the economic situation is favorable or unfavorable, or whether they lose or profit from it.

Typical forex market makers include Gain Capital, CMS Forex, Forex Capital Markets (FXCM), and Global Forex Trading, which are regulated by the Commodity Futures Trading Commission (CFTC) of the United States. Another prominent forex market maker is Saxo Bank, which is regulated by the Financial Services Authority (FSA) of Denmark.

Until recently, central banks, commercial banks and investment banks dominated the forex market. Due to the entry of forex market makers, other market players like international money brokers, large multinational companies, registered dealers, global money managers, and private speculators have entered the market in large numbers.

Forex Brokers Info provides detailed information on forex brokers, forex trading and market makers, and other topics related to forex. Forex Brokers Info is the sister site of Florida Power Web.




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