The foreign exchange market is unique because of:
· its trading volume,
· the extreme liquidity of the market,
· the large number of, and variety of, traders in the market,
· its geographical dispersion,
· its long trading hours - 24 hours a day (except on weekends).
· the variety of factors that affect exchange rates,
According to the BIS,[1] average daily turnover in traditional foreign exchange markets was estimated at $1,880 billion. Daily averages in April for different years, in billions of US dollars, are presented on the chart below:
This $1.88 trillion in global foreign exchange market "traditional" turnover was broken down as follows:
· $621 billion in spot transactions
· $208 billion in outright forwards
· $944 billion in forex swaps
· $107 billion estimated gaps in reporting
In addition to "traditional" turnover, $1.26 trillion was traded in derivatives.
Exchange-traded forex futures contracts were introduced in 1972 at the Chicago Mercantile Exchange and are actively traded relative to most other futures contracts.
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