The Sharks

In May 2009, Euromoney first published the results of its benchmark foreign exchange industry poll. No surprise, the Top 5 positions in the poll remained the same. Note that the Top 5 account for 61.5% market share.

The leading banks are enjoying record profitability (whereas as highlighted in a previous blog entry, currency hedge funds aren't doing too well). Volatility combined with wider bid/offer spreads continue to be major revenue contributors. Total turnover is a record USD175.3 trillion!

The interbank market caters for both the majority of commercial turnover and large amounts of speculative trading every day. A large bank may trade billions of dollars daily. Some of this trading is undertaken on behalf of customers, but much is conducted by proprietary desks, trading for the bank's own account. Until recently, foreign exchange brokers did large amounts of business, facilitating interbank trading and matching anonymous counterparts for small fees. Today, however, much of this business has moved on to more efficient electronic systems.

To gain an insight into what some of these banks' views are about the market, here are a couple of links:


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Fixed Ratio Money Management

It's been a while since I last blogged about Money Management, what many consider to be the most important yet overlooked subject in trading. As one of the three (3) pillars of trading success (the other two being Mind and Method), I therefore feel that I have an obligation to share more of my thoughts on the matter.

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