简体中文
繁體中文
English
Pусский
日本語
ภาษาไทย
Tiếng Việt
Bahasa Indonesia
Español
हिन्दी
Filippiiniläinen
Français
Deutsch
Português
Türkçe
한국어
العربية
Abstract:Very often many traders get curious when they hear that the forex market has the largest amount of capital investment in the world with over 6.2 Trillion dollars invested and roughly 1.5 Trillion dollars traded daily. Some pause to argue where these large capitals come from. To this end, we have discussed extensively in the article, the major sources of the Capital traded in the forex market today.
By: Chime Amara
Major sources of Capital traded in the forex market.
There are mainly six major contributors of the capital traded in the forex market today. These players encompass both the big banks, institutions, government, hedge fund and retail traders. Below is the list of these players in the forex market today:
· Central Banks: The Central Banks are the liquidity providers in the forex market. They set the rate at which various currencies could be exchanged. The reason why they are called liquidity providers owes to the fact that they supply the commercial banks with the foreign currencies to be exchanged at the counter (OTC).
· Commercial Banks: Commercial banks are no doubt the biggest players in the forex market today. They contribute over 70% of the capital traded in the forex market. Their positions move the market more than any other. Hence, most retail traders tend to study the direction taken by these banks to guide them in making their own decisions. The major commercial banks are in the industry are: Citi Bank 6.9%, JP Morgan 7.9%, UBS 6.2%, Barclays Bank 5.7%, Deutsche Bank 7.2%, BAML 4.2%, Goldman Sachs 8.3%, HSBC 7.3%, Morgan Stanley 8.2%, XTX Markets 5.1%, etc.
· Government: Government bodies are the third significant players in the forex market today. They contribute over 8% of the capital traded in the forex market. They are often long-term investors. Often they preserved the country's savings in different currencies to hedge against inflations.
· Hedge Fund: This is made up of a large sum of money contributed by individuals and given to an expert to trade on their behalf and deliver profits to the owners. The total amount contributed by these wealthy individuals is often so large; measuring over 5% of the capital traded in the forex market today.
· Institutions: Many big firms are known to participate in the forex market. Through forex trading, various institutions can beat inflations and sustain their business. Also, multi-national corporations can maintain their branches in different countries through forex trading. Over 3% of the capital traded in the forex market today comes from these institutions.
· Retail/Individual Traders: Individual traders constitute the largest population of participants in the forex market today. They provide the least capital in the market despite having the largest number. Often only 1% of the capital traded in the forex market today comes from the individual. The reason is understandable as virtually every trader leaves 90% of their capital with the commercial banks while investing with the rest. The bank in return now has large capital at its disposal to participate in the forex market.
Disclaimer:
The views in this article only represent the author's personal views, and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness and timeliness of the information in the article, and will not be liable for any loss caused by the use of or reliance on the information in the article.
A recent allegation against STP Trading has cast doubt on the firm's business practices, highlighting the potential risks faced by retail traders in an increasingly crowded and competitive market.
The UK Financial Conduct Authority (FCA) has issued a public warning regarding a fraudulent entity impersonating Admiral Markets, a legitimate and authorised trading firm. The clone firm, operating under the name Admiral EU Brokers and the domain Admiraleubrokerz.com, has been falsely presenting itself as an FCA-authorised business.
A 57-year-old Malaysian man recently fell victim to a fraudulent foreign currency investment scheme, losing RM113,000 in the process. The case was reported to the Commercial Crime Investigation Division in Batu Pahat, which is now investigating the incident.
FXTM is a global forex broker founded in 2011. In today’s article, we are going to show you what FXTM looks like in 2024.