Forex Overview

DGCX Fututres & Options CFD's On Futures


Introduction

Foreign Exchange is also known as "FX" or "Forex". Forex refers to the worldwide market for exchange of national currencies. Currencies are interchanged on a daily basis by central banks, major corporations, brokerages and even individual traders.

The Forex market is the most liquid market in the world. It is also the world's largest financial market, boasting a daily turnover in excess of $3.2 trillion (as of October 2007). In comparison, the combined daily turnover for the global equity market is estimated at $280 billion. This is a small slice when compared with the forex market, less than 10% (World Federation of Exchanges data, ca. 2006).

Unlike stock exchanges like the NYSE, the Foreign Exchange has no central marketplace ("exchange") or trading floor where most transactions occur. Instead, trading occurs through a network of players and intermediaries located throughout the world. This type of market—one that does not require a centralized exchange is called an "Over the Counter" market. We can also call this a virtual market space.