ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -There is actually no central location for the forex market-it is a distributed electronic marketplace with nodes in financial firms, central banks, and brokerage houses. 24/7 forex trading can be segmented into regional market hours based on peak trading times in New York, London, Sydney, and Tokyo.

Detailed explanation-2: -What Are Examples of Spot Markets? Many commodities have active spot markets, where physical spot commodities are bought and sold in real-time for cash. Foreign exchange (FX) also has spot currencies markets where the underlying currencies are physically exchanged following the settlement date.

Detailed explanation-3: -Participants in the foreign exchange market are mainly financial institutions such as hedge funds, investment managers, multinational corporations, and commercial, investment and central banks. Retail trading accounts for only 6% of the total foreign exchange market worldwide.

Detailed explanation-4: -Understanding a Spot Trade The spot foreign exchange (forex) market trades electronically around the world. It is the world’s largest market, with over $5 trillion traded daily; its size dwarfs both the interest rate and commodity markets. The current price of a financial instrument is called the spot price.