| | Gems in IB Chapter 9. The Foreign-Exchange Market (Site not responding. Last check: 2007-10-10) |
 | | (267) The traditional foreign-exchange instruments that comprise the bulk of foreign-exchange trading are spot, outright forwards, and FX swaps; beginning in the 1970s, FX transactions extended to currency swaps, options, and futures; a swap, which entails both a spot and a forward transaction [i.e., a "hedge"], is usually accounted for as as single transaction. |
 | | (269) The largest FX-trading market by far is in the UK because of London's location close to the major capital markets in Europe and because London is positioned in a unique way due to its time zone (Greenwich, Zulu) between the Asian FX markets and the American FX markets. |
 | | (279) Of the 2000 dealer institutions worldwide that make up the FX market, around 200 are market-making banks in the sense that they are willing to quote bid and offer rates to anyone in the currencies in which they deal; dealers operate mostly in the interbank market with dealers of other banks. |
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