The growth of internet based trading has created a close to zero-cost delivery system. Because of this revolution in technology, the foreign exchange markets are no longer the domain of the large traders with multimillion dollar accounts and connections at large banks.
Thanks to universal information, market participants can distribute rates and price spreads 24/7 to everyone from small-time retail players to the major league investor. Use of the Internet in foreign exchange investing means no errors or transaction volume constraints. Also, active traders can take advantage of even the narrowest of margins, therefore increasing the potential of the smallest retail client, who is accustomed to paying as much as 5% to trade foreign exchange. The majority of single portals currently making trading platforms available are all in competition with one another.
There are three distinct types of Internet trading platforms which are available for use to all market participants.
Click-N-Deal: This is the most common in the market as well as the most transparent, in that the pricing isn’t marked one way or another, due to the lack of trader intervention. The prices are live and instantly tradable simply by clicking on a currency pair.
Request-For-Price: This platform utilizes a chat function for requesting prices which requires a trader to pick up the discussion and to actually type in the price. The downside is that since the trader has time to check a client’s position before quoting a price and has the ability to ‘shade’ the price one way or the other.
Instant Anonymous Trading: This occurs between principles, allowing traders to see every bid and offer in the book. This significantly increases market transparency.
Disclimer: This website is for informational purposes only and is not intended to provide
specific commercial, financial, investment, accounting, tax, or legal advice.
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