Part II. Participants, participants… Pipruit: Greetings, commander, I’ve heard that in recent time the share of bank’s transaction on FOREX becomes lower than even 10 years ago, and you’ve said that FOREX in general an interbank market. So, who are the major participants in FOREX trading? Commander in Pips: You’ve asked the right question, son. Indeed the part of pure banking transactions jas become lower. So let’s talk about the different participants on the market and their role in FOREX. According to a study by the of Bank for International Settlement, in early 90’s banks were responsible for 90% of FOREX transactions. That meant that in 9 out of 10 trades, the FX desk of some bank was on one side of the transaction. By 1998 this number gradually reduced to approximately 82%. In 2004 this number was lightly below 65% and current estimate tells us that banks barely account for about half of transactions, about 53%. Now we are talking about the spot FOREX. On other market segments, such as swaps for example, the share done by bank could reach as much as 90%. So, as we’ve discovered, the biggest participants in the FX market are banks. What banks? According to a survey by Euromoney FX, the top 10 currency traders are: In fact, you can see that Large Banks determine the trading conditions on FOREX. Because FOREX is an Interbank market. Due to huge trading volume among themselves, these banks, that I’ve mentioned in the table have very tight spreads – 0.00005-0.0001 or even no spread at all. In fact we trade FOREX with spread that is based on their estimation. It means that if they will widen this spread for some reason, then, we also will see wider spreads on our computers. Every large bank could have billions USD of daily turnover on behalf of customers and for the bank’s own account.