In contrast to the securities, which are traded on regulated markets, the currency transactions are made over-the-counter (OTC), between buyers and sellers all over the world.
Due to the fact that all these market participants are not centralized in one physical location, the exchange rates can vary between different banks or brokers.
The market is open 24 hours a day, from Sunday to Friday, as trading starts in New Zealand, followed by Australia, Asia, the Middle East, Europe and America.
The main players in this market are the biggest Central and Investment banks, pension and hedge funds, large corporations, that perform most of the turnover of the Foreign exchange market.
Considering the amount of the transactions being made, there is no daily data, as it is with a single market, all this thanks to the decentralized trading.
The most commonly cited turnover in this market is 1.88 trillion. dollars – data, presented in a report of the Bank for International Settlements. This research has been made by the help of 52 Central Banks and monetary authorities.
This amount exceeds 10 times the turnover of the global foreign exchange markets, and in comparison with, the New York Stock Exchange, the largest stock exchange in the world, reported about $ 100 billion a day.
According to the type of instruments, nearly half of the turnover (944 billion dollars) is formed by SWAP-exchange, 621 billion dollars are due to the spot market, and 208 billion dollars- to the forwards.
The main currency for trading is the U.S. dollar, which in 88.7% of the cases, is a party of the transaction. It comes the euro with by 37.2%, then the Japanese yen – 20% and the British pound with 17 per cent. Euro / dollar is the most traded currency pair with 28% of total turnover, dollar / yen holds 17%, while dollar / pound – 14 per cent. With regard to the geography, the largest shopping center remains the UK, where 31% of the turnover is made, followed by the U.S. with 19%, Japan – 8%, Singapore and Germany with 5 per cent.
The unification of larger banks leads to a centralization of the turnover in several big institutions. Eleven banks in the U.S. are responsible for 75 percent of transactions there, sixteen in the UK, eleven in Japan too, while in Germany there are only four in number.
With the development of the Internet technologies during the past few years, the currency trading has become accessible to the average investors. More and more online brokers offer services to people willing to speculate on this market.