| The forex markets is the largest and most liquid | | | | does provide a continuous "real-time" market |
| market in the world. The estimated worldwide | | | | assessment of the currencies' values. |
| turnover of reporting dealers, at around $1 ½ | | | | The market contain a limited number of major dealer |
| trillion a day, is several times the level of turnover in | | | | institutions that are particularly active in foreign |
| the U.S. Government securities market, the world's | | | | exchange, trading with customers and (more often) |
| second largest market. | | | | with each other. Most, but not all, are commercial |
| Almost two-thirds of the total transactions | | | | banks and investment banks. The institutions are |
| represents transactions amongst the various dealers | | | | linked each other through telephones, computers and |
| themselves - with only one-third accounted for by | | | | other electronic means. There are estimated 2,000 |
| their transactions with financial and non-financial | | | | dealer institutions in the world, making up the global |
| customers. Among the various financial centers | | | | exchange market. |
| around the world, the largest amount of foreign | | | | Each nation's market has its own infrastructure. For |
| exchange trading takes place in the United Kingdom | | | | foreign exchange market operations as well as for |
| (1998: 32%), followed by the United States with | | | | other matters, each country enforces its own laws, |
| 18%. | | | | banking regulations, accounting rules, and tax codes. |
| The forex trading market place is a 24 hour market | | | | They also have different national financial systems |
| with exchange rates and market conditions changing | | | | and infrastructures through which transactions are |
| constantly. However, foreign exchange activity does | | | | executed and within the currencies are held. |
| not flow evenly. Over the course of a day, there is a | | | | When access to all of the foreign exchange markets |
| cycle characterized by periods of very heavy activity | | | | generally open to participants from all countries, and |
| and other periods or relatively light activity. | | | | with its vast amounts of market information |
| Business is most heavy when 2 or more market | | | | transmitted simultaneously and almost instantly to |
| places are active at the same time such as Asia and | | | | dealers throughout the world, there is an enormous |
| Europe or Europe and America. Give this uneven flow | | | | amount of cross-border foreign exchange trading |
| of business around the clock, market participants | | | | amongst dealers as well as between dealers and their |
| often will respond less aggressively to an exchange | | | | customers. At any moment, the exchange rates of |
| rate development that occurs at a relative inactive | | | | major currencies tend to be virtually identical in all of |
| time of day, and will wait to see whether the | | | | the financial centers. Rarely are there such substantial |
| development is confirmed when the major markets | | | | price differences among these centers as to provide |
| open. Nonetheless, the twenty-four hour market | | | | major opportunities for arbitrage. |