Exchange rate difference between foreign exchange market and arbitrage trading: there are branches or correspondent banks in the foreign exchange market; Exchange rate changes and trends in the foreign exchange market, and take prompt action according to the forecast. Otherwise, more complex arbitrage will get twice the result with half the effort. Arbitrage trading places
Arbitrage trading is not concentrated in one exchange like stocks and futures. In fact, both parties to the transaction can conduct transactions through telephone or electronic trading network. Therefore, the arbitrage market is called the over-the-counter market or the "inter-bank" market.
Participants in the arbitrage market
Arbitrage market is called "inter-bank" market because it has long been controlled by banks, including central banks, commercial banks and investment banks. However, today's trading entities are expanding rapidly, and some multinational companies, international money managers, registered dealers, international money brokers, futures and options dealers and private speculators are also involved.
Arbitrage trading time
In fact, the arbitrage market is a real-time 24-hour trading market. Trading starts from Sydney every day. With the rotation of the earth, the business days of financial centers around the world will start in turn, first in Tokyo, then in London and new york. Different from other financial markets, in the arbitrage market, investors can respond to exchange rate fluctuations caused by economic, social and political events, no matter during the day or at night.
Transaction currency type
In arbitrage trading, the main currency refers to the currency issued by a country with stable political situation, recognized by the central bank, with relatively stable exchange rate, usually used for trading or with strong liquidity. Today, about 85% of the daily trading volume is in these major currencies, including US dollar, Japanese yen, Euro, British pound, Swiss franc, Canadian dollar and Australian dollar.