Where is the central location of the FX Market?

Where is the central location of the FX Market?

Answer #1

Hi,

For most currency instruments, there is NO central location where trading takes place. This is called the forex “spot market,” not to be confused with currency futures or options. The bulk of forex (Foreign Exchange) trading takes place between a few hundred large banks that process transactions for large companies and governments. These institutions continually provide exchange rates for each other and for the broader market.

The most recent quotation from one of these banks is considered the market’s current pricing for that currency. Trading occurs over the internet, by telephone and through computer terminals at hundreds of locations around the globe.

Hope that helps!

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