Commercial and Investment Banks

Banks need no introduction; they are ubiquitous and numerous. Their role is crucial in the Forex network. The banks take part in the currency markets to neutralize the foreign exchange risks of their own and that of their clients. The banks also seek to multiply the wealth of their stockholders.

Each bank is different in terms of its organization and working policy, but each one of them has a dealing desk responsible for order processing, market-making, and risk management. The dealing desk plays a role in making profits by trading currency straight through hedging, arbitrage, or a mixed array of financial strategies.

There are many types of banks in a forex market; they can be huge or small. The most sizeable banks deal in huge amounts of funds that are being traded at any instant. It is a common standard for banks to trade in 5 to 10 million Dollar parcels. The biggest ones even handle 100 to 500 million Dollar parcels. The following image shows the top 10 forex market participants.

Forex Market Participants

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