Jodi Burns is a senior analyst is the Securities & Investments practice at Celent Communications.
Jodi Burns is a senior analyst is the Securities & Investments practice at Celent Communications.

Trends in the electronic cash Foreign Exchange markets

Jodi Burns outlines how the forex market is going through many of the exciting market trends seen in more developed asset classes such as equities and fixed income.

First Published: e-Forex Magazine 18 / Marketplace / April, 2005

While almost 50 percent of institutions claim to have no interest in electronic trading, this attitude simply cannot persist. It is true that certain financial products are not ready to be traded electronically (e.g., complex credit derivatives, non-standardized interest rate derivatives), but forex is not one of them. Forex is standardized, incredibly liquid, and for at least the next few years, mostly traded on a non-speculative basis (so institutions want to trade as cheaply and easily as possible).Inter-dealer e-tradingCelent estimates that 60 percent of inter-dealer trading is done electronically, and predicts this will increase to 90 percent of trading by 2007, for several reasons. The inter-dealer e-trading platforms are growing bigger and more liquid over time, which should attract trading interest from banks that are conducting their largest trades over the phone.Second, banks that trade over the phone do so for several reasons. For example, they may be looking to trade odd lots or broken dates,...continued

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