Participants of FOREX

Participants of FOREX

The participants of this market, first of all, are large commercial banks through which the

basic operations under the instruction of exporters and importers, investment institutes are

carried out, insurance and pension funds, hedgers and private investors. These banks also carry

out the operations in the interests due to own funds, thus volumes of daily operations in the large

banks reach billions of dollars, and the basic part of the profit is formed only due to speculative

operations with currency at some banks. Except for banks, the broker houses carrying out a role

of the intermediary between a plenty of banks, funds, commission houses, the dealing centers,

etc. Commercial banks and broker houses not only make operations on sale and purchase of

currency at the prices which are exposed by the other active participants, but also offer own

prices. Thus, they actively influence the process of pricing and a life of all market, therefore they

are called (market makers).

As against the active participants, the passive participants of the market cannot expose

own quotations and make currency purchase-sale under the prices offered by active participants

of the market. Passive participants of the market usually pursue following purposes: payment of

export-import contracts, foreign industrial investments, opening of branches abroad or creation

of joint ventures, tourism, gamble on a difference of rates, hedging of currency risks, etc. The

Central banks of the different countries come on FOREX, not only with the purpose of extraction

of the profit, as a rule. They usually do it with the purpose of stability check up, or correction of

an existing rate of the national currency. The correction of an existing rate of national currency

influences on the national economy condition. The central banks also come out on the currency

market through the commercial banks. Profit extraction is not the basic purpose of these banks,

but unprofitable operations do not involve them as well. The central banks of different countries

can carry out also the joint coordinated interventions. If the active participants make the

operations with the big sums of a few million dollars, the passive participants can use margin

trade. They have an opportunity to temporarily operate the capital, in one hundred times

exceeding their deposit. Such way of trade allows to take a part in work of the currency market

to fine investors with small capital and thus to receive significant profit. The structure of the

basic participants of the market testifies that this market is actively used by “the serious business

", for the serious purposes. That means not all the market participants use FOREX in speculative

purposes.