Preschool - Forex Market

Question 1

Who are the Players in the Forex Market

Answer 1

Major Banks(Interbank largest bank players)->Electronic Brokering Services(EBS) & Reuters->Medium and Small Bank->Retail Market Markers/Retail ECN/Hedge Funds and Commercial Companies ->Retail Traders

Question 2

Who are some of the large players part of Interbank

Answer 2

Citi, JPMorgan, UBS, Barclays, Deutsche, Goldman Sachs, HSBC, Bank of America

Question 3

Which system set the rate between USD and Gold

Answer 3

Bretton Woods System. After WW2, set USD against Gold, allowing other currencies to be pegged against USD

Question 4

When was the Breeton Woods Agreement abolished

Answer 4

1971. Currency Market became free floating, supply/demand based.

Question 5

What is the difference between Market Makers and ECN

Answer 5

Market makers “make” set their own bid/ask prices
ECN Electronic Communications Network - Use the best available Bid/Ask across the network of institutions on the interbank market