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This paper seeks to empirically determine whether feedback trading strategies result in stabilization or destabilization in the foreign exchange market and if such strategies are a distinctive characteristic of an emerging economy or they are a common element to both developed and emerging economies. These hypotheses are tested via the use of a feedback model augmented with a generalized autoregressive conditional heteroskedasticity (GARCH) process for modeling the errors. The results suggest presence of both positive and negative feedback trading and asymmetric behavior in both types of economies. Irrespective of the nature of feedback trading, presence of asymmetric behavior implies that market traders rely on central banks to intervene so they can realize short-term profits. Finally,...
...CHAPTER I: COMMODITY FUTURES TRADING COMMISSION. PART 4: COMMODITY POOL OPERATORS AND C... OPTION OR ENGAGE IN OFF-EXCHANGE FOREIGN CURRENCY TRADING YOU MAY SUSTAIN A TOTAL LOSS OF T...IF THE MARKET MOVES AGAINST YOUR POSITION, YOU MAY BE CALLED UPO...
Electronic trading has revolutionized markets. In the equities markets, algorithmic trading platforms, high-frequency trading and smart order routing are just some of the technologies transforming the way stocks are traded. But as the largest market in the world in terms of liquidity, with approximately $3.2 trillion being traded daily, the foreign exchange market is evolving at a rapid pace. Electronic trading platforms cater to a myriad of different market participants and provide rapidly growing levels of functionality. The FX market has come a long way since the days when it was largely a voice-traded market. One of the biggest benefits of electronic trading is that it has opened up the FX markets to a wider range of participants, whether it is market makers, hedge funds, institutio...
TOKYO (Reuters) - Japan's financial regulators are planning to levy fines on foreign investment funds that engage in insider trading and other improper market activities, the Nikkei business daily reported. The Financial Services Agency and the Securities and Exchange Surveillance Commission will ramp up oversight on transactions to clamp down on illicit practices, the newspaper said.
Foreign exchange trading activity has continued to expand rapidly throughout the global financial crisis, although the first signs of stress in the world's biggest market began to appear in early October, as banks became reluctant to supply liquidity as they hoarded cash. Amid the global market turmoil, FX has proven itself as a separate asset class that can generate alpha and continue to function smoothly when other markets are disrupted. Growing revenues from FX trading have helped some banks to weather the difficult financial and economic environment. One reason that foreign exchange trading volumes have continued to expand amid this year's financial turmoil is the presence of continuous-linked settlement, which takes settlement risk out of the market, traders say. The Federal Reserv...
In the old days, say 10-15 years ago, the foreign exchange market was the playground of big banks and multinational corporations. Soon the curtain cracked; firms were consolidating smaller orders to play in the trillion dollar market. And then, with the growth of electronic trading, the curtain opened wide. Foreign exchange no longer was some dark place where small traders feared to tread, in fact, a new "industry" was born to service their demand. But the growth of the retail forex sector has attracted its share of sleazy profiteers that the US regulators want to stop. In an effort to expel these, the National Futures Association and Commodity Futures Trading Commission (CFTC) have implemented tough new capitalization requirements for online forex dealers in the wake of the CFTC's May ...
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