Key Forex Market Participants


Forex market participants

The main participants in the Forex market are, first of all, specialized banks through which the main operations are carried out to confirm exporters and importers, investment institutions and funds. The latter include insurance and pension agencies.

In addition, speaking of such operations, it is impossible not to mention hedgers and private investors. In addition, these large banks conduct operations in their personal interests at their own expense, with daily operations reaching billions of dollars. It is interesting that for some lending institutions the bulk of the income is generated through speculative transactions with currency.

So, with the banks sorted out. But they are far from the only subjects of the operations under consideration. In addition to them, there are brokerage houses that act as an intermediary between a large number of banks, funds and houses of commission functionality, as well as dealing centers.

Commercial banks and brokers not only carry out operations for the purchase and sale of foreign currency at the cost that other participants offer, but they themselves are ready to issue their prices. Thus, they most actively influence the process of pricing and the activities of Forex, so they are called market makers (from the English word).

Unlike active members of the Forex market, its passive participants cannot set their personal currency quotes and have the right to carry out purchase and sale operations at prices that are offered by active market players.

Thus, the main goals of finding passive participants in the Forex market are:

– payment of contracts of export-import content;
– investment of foreign industrial purpose;
– the formation of branches abroad or the creation of enterprises;
– tourism;
– speculative operations on the difference in rates;
– hedging of foreign exchange risks, etc.

So, the composition of the Forex market participants includes:

– Commercial banks.
– Companies engaged in foreign trade operations.
– Companies investing assets abroad.
– Central banks.
– Currency exchanges
– Currency brokers.
– Private individuals.

Private individuals who operate in the Forex market can include investors who decide to make money in the market themselves. In addition to such investors, Forex includes professional players. These include:

– market makers;
– Central Bank of various countries;
– exporters and importers;
– insurance organizations;
– intermediaries providing services to private and commercial entities.

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