Market Structure Question
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thread: Market Structure Question

  1. #1
    Junior Member hugominola1's Avatar
    15

    Market Structure Question

    Hey men,

    I've a question concerning market structure that I have asked in this forum before, but haven't really received a response. I will ask it in its own thread.

    How exactly does the interbank market close for the weekend? Can Reuters and EBS shut down Friday at 5pm EST, exactly like the Australian Stock Exchange does each day, or are orders matched at any time (including weekends)? If the deal fitting systems do shut down, then do the banks continue to trade through other mechanisms?

    Moreover, how can the commencement of trading occur between the major banks in the close of the weekend? Is there an specific time that banks begin trading with one and other?

    Anyone have some ideas?

    Cheers

  2. #2
    Junior Member Alexyeah's Avatar
    15
    There is a senior trader called Jay Norris, his username here's Trout, I believe he is one of those that will provide with you accurate answers for this type of questions.

  3. #3
    Junior Member hugominola1's Avatar
    15
    Doesn't anybody out there have the answers to my own questions?

  4. #4
    FX-markets close together with the last daylight-zone on Fridays (NYK) and open with the first daylight-zone on Mondays (Asia - making it Sunday day for Europe).

    That goes for retail and many ECN's. The order publications move with the daylight zones.

    There's not any order fitting inbetween.


    regards

  5. #5
    Junior Member Oxnuarns's Avatar
    23
    It closes, it is only that the banks are not open anywhere so volatility is dead. It is still possible to go to the bureau de change and produce a transaction, although you may not enjoy the spread. The Ozzie stock exchange includes a designated open and final time as it's a market upon which the stocks which are recorded upon it are bought are sold. The FX market is OTC, all it requires is a buyer and seller with effective demand and supply to fulfill for business to be done. The huge majority of business is ran on Electronic Communiion Networks which the banks have been wired around, but as the banks are not trading on the w/e, then these lie dormant until the banks in Asia open Monday morning.

  6. #6
    ...I wonder what the Thomas Cook Bureau de Change worker would say if you turn up in his counter top with 3 million US$ on a Saturday afternoon and demanded to exchange for the equal quantity of Yen - besides the fact whether you enjoy the given rate or not.

    regards

  7. #7
    Junior Member hugominola1's Avatar
    15
    Hey Men,

    Thank You for the Answers. I am just having a small tough time understanding why the banks stop trading at exactly 5pm NYT friday. There's a lot of cash at stake and it just looks weird to me that they would stop trading completely just because business hours have ended. It'd make more sense if routers and ebs shut down at 5pm and did not make it possible for them to put trades through their own networks, but even then I would have believed that the banks could continue trading directly with one another.

    I am also having a hard time knowing how my broker (Oanda) can fill orders over the weekend. They assert to hedge every trade, so who are thay hedging with? The spread is 10 pips for majors, which isn't really very much. Not nearly enough to cover the risk they'd be undertaking if they don't hedge the orders.

    Also, Oanda opens around 4-5am Sydney time, a long time before sydney begins trading. There's not ever a weekend difference from the Oanda charts beacause of the. In fact, it would appear that Oanda is producing the openings in other brokers feeds by creating a market before they open. Why would the huge banks allow one little broker and their clients dictate in which the market price will probably be if they open their trading, without participating in this move?

    It just seems that there is something I am missing here.

  8. #8
    Junior Member Oxnuarns's Avatar
    23
    ...I wonder what the Thomas Cook Bureau de Change worker would say if you turn up in his counter with 3 million US$ on a Saturday morning and demanded to swap it for the equivalent amount of Yen - besides the fact whether you enjoy the given rate or not.

    Regards
    daytrading
    Honest purpose, which is why I included the caveat of powerful supply. Mind you, in the profit margins that they operate with, I am sure they'd do their very best to give you (and take) what they could.

  9. #9
    . . .yep, legal rip-off against each tourist, hahaha

    regards

  10. #10
    Junior Member Miniiok25's Avatar
    26
    If I'm not wrong, there are brokers that Take orders over the weekend provided That the leverage is switched to 1:1
    so when there is an order over the weekend, Likely it is the physical currency exchange takes place internally Inside the broker system (orders dont go Outdoors, with high spread they Could physically Swap one Kind of currency to another with profit)...
    That's why spread is high and leverage is 1:1,
    well thats my guess, im not sure how else trading in the weekend Could be done without a counterparty

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