A Brief History of the FX Market’s Evolution
Foreign Exchange Markets
Predicting FX Movement
Basic FX Instruments
Trading Floor Dynamics
FX Options: An Intuitive Approach
Famous Formulas, Fame and Fortune
Getting to the Formula and the Correct Probability Distribution
The Greeks – A Practical Approach
Portfolio Management and Second-order Greeks
FX Options Trading Book & Risk Measurement
Hedging FX Risk at Corporations
You Have Options
Situations Gone Mad, From the Most Complex to the Simplest
Speculators and Hedge Funds: How Do Portfolio Managers Make Money?
Speculating and Hedging: The Fundamental Differences
The foreign exchange market is the biggest of the capital markets, with an average daily turnover in excess of US$5 trillion. That is such a mind-boggling number; to put it into perspective, consider that in one week its turnover is sufficient to cover world trade for a whole year. It is also one of the most exciting markets. It is a battle of wits between computers, central bankers, traders, hedge funds, corporations, asset managers, debt managers and speculators, from Monday morning in Wellington to Friday evening in New York. Given the globalisation of savings, all of the factors that drive debt and equity markets can influence the foreign exchange market and more.
The FX market is more akin to the three-level chess played in Star Trek than the two-dimensional version we may be more familiar with. There is the cash or spot market, multi-segmented derivatives markets (eg, forward, futures and swaps), an options market, and all sorts of combinations thereof. Liquidity is shifted through these various channels, and there is great variation among the currencies.
The foreign exchange market is also a new market even though both money and exchange are as old as recorded history