Forex Market Size

Forex Market Size

Today, the 24 hour running market of foreign exchange trading is the most liquid as well as the largest market in the world, beating even the stock market.

This market has a wide variety of participants who also act as the foreign exchange traders. The traders include central banks, large banks, government, corporations, currency speculators as well as other institutions running the finance businesses.

The average volume in the global market of this foreign exchange trading has always been growing ever since it was built and opened to the public. In one day, a market can turn over US$ 3.2 trillion. This is what was reported by Bank for International Settlements. Yet, according to a poll initiated by Euromoney’s annual FX Poll, the volume rises by 41% in between the year 2007 and 2008.

Since London dominates the global foreign exchange market, it has also dominated the turnover globally. This also applies to the global turnover. London obtained around $1.36 trillion dollar from the total global turnover of $3.98 trillion a day. That gives London a share of as much 34.1% of the total. The city of New York comes out at the second place with the acquaintance of 16.6% while Tokyo comes out at the third place with an acquaintance of 6%. To add to the turnover, the derivatives that are traded as well were able to give us as much $2.1 trillion.

In the year 1972, exchange-traded foreign exchange futures contracts was introduced for the very first time. The futures contracts were introduced at Chicago Mercantili Exchange. Since then, the contracts have been traded relatively to most other futures contracts.

Not all countries permit the trading of foreign exchange derivatives. These derivatives include but not limited to currency futures as well as options on currency futures. The developed countries which have already permitted the trading of these derivatives have as well possessed accounts that are fully convertible.

During the period of April 2005 to April 2006 the trading of the foreign exchange has experienced an increase that reached as much 38%. It has also increased significantly compared to the year 2001. This indicates that the foreign exchange industry is always growing and becoming more and more important. Foreign exchange has been an asset class and it has also resulted in an increase in the assets of fund management, especially in pension funds as well as hedge funds.

Forex Blog: Facilitateforex