Forex Positions Taking

Much of the activity in trading rooms is focused on marketing services and maintaining customer relationships. Customers may include treasurers of corporations and financial institutions; managers of investment funds, pension funds, and hedge funds, and high net worth individuals. A major activity of dealer institutions is managing customer business, including giving advice, suggesting strategies and ideas, and helping to carry out transactions and approaches that a particular customer may wish to undertake.


Dealers also trade foreign exchange as part of the bank’s proprietary trading activities, where the firm’s own capital is put at risk on various strategies. Whereas market making is usually reacting or responding to other people’s requests for quotes, proprietary trading is proactive and involves taking an initiative.


Market making tends to be short-term and high volume, with traders focusing on earning a small spread from each transaction (or at least from most transactions)—with position taking limited mainly to the management of working balances and reflecting views on very short-term forces and rate movements.