Players in the Forex Market

The Forex Market is one of the most liquid markets in the world. It benefits a lot of traders and is always said to be buzzing with activity. The Forex market has, in its fold, a huge variety of members ranging from ordinary individuals to multinational companies. In this article, we will get to know the list of active players in the Forex Market. The players are broadly classified into the following categories:

a. Banks
b. Commercial Companies
c. Central Banks
d. Hedge Funds
e. Investment Management Firms
f. Retail Forex Brokers
g. Others

Banks – Banks were playing a major role in Forex trading during the initial stages. However, now, with a lot of brokers in the field, the role of banks is limited. However, there are a few banks which indulge in interbank trading of currencies on behalf of their customers. Millions and millions of dollars are traded by the banks every day in the Forex market.

Commercial Companies - Companies need money for financing their day to day activities; hence they actively participate in Forex trade. The quantity of trade that the companies undertake is much lesser than those of banks; however, the quality of trade is as active as those of banks. Many private multinational companies are now so actively trading in the Forex market, that their performance can decide the fate of the whole market.

Central banks – Central banks always play the role of regulator or controller of finances. In the Forex market too, these banks have a check on the Forex trade that is done daily, the volumes that can be manipulated and the tolerance level of trade that happens daily in the market.

Hedge funds – These are the ones that deal in equity and hence they are involved in millions and millions of dollars of Forex trade. Even the central banks do not have a perfect control over them because of the sheer magnanimity of the volumes traded.

Investment Management Firms – These firms typically deal in foreign securities and hence they make use of the Forex market hugely due to currency swapping. Investment management firms have a lot of customers who are spread across the globe and hence it becomes necessary to deal in Forex to maintain these funds properly with accuracy.

Retail Forex Brokers – These are certified brokers by the regulatory bodies and they are fully qualified to participate in the Forex trading. They directly deal with the customers and trade on the customer’s behalf. They have a list of preferences given by the customer and exercise a close check on the trends of the Forex market to make the most of currency fluctuations.

Others – There are some exclusive foreign exchange companies or foreign exchange brokers who are neither nonprofit, nor non banking organizations. These kinds of players have a separate clientele of their own and hence they have got their own set of preferences based on the tastes of their clientele.

All these players put together, make the Forex Market a really volatile and busy place where millions are traded each day.