marketsurfer trys forex--part 2

The Federal Reserve Bank of New York

http://www.ny.frb.org/education/fx/print.html (The Basics of Foreign Trade and Exchange)

Q

The FX market is fast paced, volatile and enormous—it is the largest market in the world. In 2001 on average, an estimated $1,210 billion was traded each day—roughly equivalent to every person in the world trading $195 each day.

...

Spot transactions: This type of transaction accounts for almost a third of all FX market transactions.

UQ

http://www.ny.frb.org/education/addpub/usfxm/ (The Foreign Exchange Market in the United States )

:confused:
 
do you use x trader?

I would like any opinion you would be willing to share about

the EUR / USD size between bid and offer ... if you think it matters

or is used to fake out futures traders ...
 
Quote from marketsurfer:




thanks for the info, swoop. however, i think it needs to be made clear that the "big guys" are dealing directly in the interbank market and do not use dealers nor pay spreads. do you know where the dollar volume of spot quoted by the dealers can be verified ?

thanks !

surfer
More...

Sorry, I was out of the country for the past 6 hours and couldn't answer your questions. The interbank network is made up of the bank dealers and you do pay the spread like everyone else. I trade with UBS, but also with OANDA and Saxo Bank. They are online like most smaller market makers like OANDA, Saxo, FXCM, etc. However, you have to request a quote and then accept or reject the quote, similar to the old way of using the phone.
 
The quote from Kovner is from a long time ago, the spreads in euro/usd have been going down since the last year, they used to be much bigger. Problem also is these guys really want to move SIZE meaning more like a 1000 futures in one go. For any normal retail trader futures however are the better deal imo.
 
Marketsurfer:

The spot guys are always quick to talk about the $1.5 trillion daily volume. However, what they fail to tell you is $1.5 trillion is the total for all foreign exchange transactions. The spot market represent about 30% for the total. Lets not forget forwards & swaps, thats were the bulk of the volume is coming from. The spot market is loosing market share to the futures market. Case in point, take a look at the published price of any currency pair of 3 different spot dealer's at any one time. You'll see 3 different prices. Why, because their market is decentralized and it is their best guess of were the market is(no one really knows). As opposed to futures were the market is centralized & "the price is the price." Volume continues to grow in the futures market and my best guess(among others) as to why is because the spread & transaction cost has become more competitive to the spot market. Just my opinion.
 
Quote from fxtrader:

Marketsurfer:

The spot guys are always quick to talk about the $1.5 trillion daily volume. However, what they fail to tell you is $1.5 trillion is the total for all foreign exchange transactions. The spot market represent about 30% for the total. Lets not forget forwards & swaps, thats were the bulk of the volume is coming from. The spot market is loosing market share to the futures market. Case in point, take a look at the published price of any currency pair of 3 different spot dealer's at any one time. You'll see 3 different prices. Why, because their market is decentralized and it is their best guess of were the market is(no one really knows). As opposed to futures were the market is centralized & "the price is the price." Volume continues to grow in the futures market and my best guess(among others) as to why is because the spread & transaction cost has become more competitive to the spot market. Just my opinion.
More...


yes. thank you for the information. i totally agree the futures are where to be for traders. with the futures market, i can't understand the existence of fx dealers. reminds me of the uk spread betting concept.

best,

surfer
 
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