The major traders in the spot market are the commercial banks and the investment banks, followed by hedge funds and corporate customers. In the interbank market, the majority of the deals are international, reflecting worldwide exchange rate competition and advanced telecommunication systems. However, corporate customers tend to focus their foreign exchange activity domestically, or to trade through foreign banks operating in the same time zone.
Although the hedge funds' and corporate customers' business in foreign exchange has been growing, banks remain the predominant trading force.
The bottom line is important in all financial markets, but in currency spot trading the antes always seem to be higher as a result of the demand from all around the world. The profit and loss can be either realized or unrealized. The realized profit and loss is a certain amount of money netted when a position is closed.
The unrealized profit and loss consists of an uncertain amount of money that an outstanding position would roughly generate if it were closed at the current rate. The unrealized profit and loss changes continuously in tandem with the exchange rate.
Although the hedge funds' and corporate customers' business in foreign exchange has been growing, banks remain the predominant trading force.
The bottom line is important in all financial markets, but in currency spot trading the antes always seem to be higher as a result of the demand from all around the world. The profit and loss can be either realized or unrealized. The realized profit and loss is a certain amount of money netted when a position is closed.
The unrealized profit and loss consists of an uncertain amount of money that an outstanding position would roughly generate if it were closed at the current rate. The unrealized profit and loss changes continuously in tandem with the exchange rate.
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