Market participants

By knowing the participants of the market you will be in a better situation to understand why and how price may be affected by events


Market participants

By understanding the participants of the market you will be in a better situation to appreciate why and how price may be affected by events. In doing so you will also gain confidence that there will always be buyers and sellers of currency, regardless of the price it is traded (unlike an individual stock, such as Enron).

Market participants


  • The Interbank Market consists of the largest Commercial Banks and Securities Dealers, and seeing as it accounts for approximately 40-50% of all FX transactions, it is firmly at the top of the list.

  • Being at the top, they enjoy razor sharp spreads due to trading the heaviest volumes.

National central banks

  • Try to control the money supply, inflation, and interest rates, using their substantial Foreign Exchange reserves to stabilise their domestic market.

  • This means they too play an important part on the FX markets.

Investment management firms

  • These are firms who typically manage large accounts on behalf of clients. For example, an investment manager bearing an international equity portfolio who needs to purchase and sell several pairs of Foreign currency to pay for foreign security purchases.

  • That said these firms also participate for speculative reasons, and manage clients’ money to profit from the market fluctuations and trends.

Retail traders

  • Retail traders trade indirectly through brokers or banks. They do not expect to take physical delivery of any currency and are considered to be a purely speculative market.

Non-bank FX companies

  • FX brokers who offer FX and International payments to private individuals and companies. What makes them different is they do not offer currency trading for speculative purposes, as clients are expected to take physical delivery of a currency into the bank account.

  • The interesting thing to note here is that the higher up the list you are, the thinner the spread is! Seeing as ThinkMarkets are a NDD Broker (Non-Dealing Desk) we can provide you a short-cut to the interbank price feed, and provide you interbank spreads.

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