Foreign exchange is the simultaneous buying of one currency and selling of
another. Currencies are traded through a broker or dealer and are executed in
currency pairs; for example, the Euro Dollar and the US Dollar (EUR/USD) or
the British Pound and the Japanese Yen (GBP/JPY).
The FOReign EXchange Market (FOREX) is the largest financial market
in the world, with a volume of over $2 trillion daily. This is more than three
times the total amount of the stocks and futures markets combined.
Unlike other financial markets, the FOREX spot market has neither a
physical location nor a central exchange. It operates through an electronic net-
work of banks, corporations, and individuals trading one currency for another.
The lack of a physical exchange enables the FOREX market to operate on a 24-
hour basis, spanning from one time zone to another across the major financial