What is dealing
libre 9
Dealing is the activity on operative management of financial resources. Due to its specificity, dealing is most effective when dealing with highly liquid commodities or financial assets, when the cost of transactions is less than or commensurate with changes in the market value of the contract for the time required to conclude such a contract.
Modern means of communication allow to receive information about prices with a delay of several seconds, and the use of computer technology - to make an optimal decision and conclude a deal in a fairly short time. 
The concept of the currency market
The foreignexchange market is a set of conversion and deposit and credit operations in foreign currencies, carried out between counterparties, participants of the foreign exchange market at the market rate or interest rate. A currency instrument is any transaction (contract), the subject of which is directly or indirectly a currency. In the first case, currency instruments are called basic, in the second case - derivative.
Types of currency instruments
Depending on the purpose, it is customary to distinguish interest rate and conversion currency instruments, and depending on the terms of fulfillment of obligations - current and term instruments.
Conversion operations
Conversion operations are the exchange of monetary amounts expressed in currencies of different countries at an agreed rate with settlement on a certain date. To designate the market of conversion operations in international practice it is customary to use the designation FX or Forex (FOREX - FOReign EXchange). 
Today the main currencies, which account for almost 90% of transactions are: the American dollar, the Japanese yen, the British pound, the euro, as well as the Swiss franc, the Australian and Canadian dollars. According to the Bank of International Settlements, as of April 2010, the daily turnover on the world FOREX market amounted to almost 4 trillion US dollars.
The volumes of operations on the world FOREX market are constantly growing. This is due to the development of international trade and the abolition of currency restrictions in most countries. The daily volume of transactions of the largest international banks reaches billions of dollars. A typical transaction volume for interbank trading is 10 million dollars.
The modern FOREX market, which is characterized by periods of increasing price volatility and their relative stability, periodically succeeding each other, was formed in the twentieth century. By the mid-30s, London was the leading center of currency trading, and the British pound was the currency for settlements and the creation of foreign exchange reserves.
History of FOREX
After World War II, when the British economy suffered huge losses, and the United States was the only industrialized country economically affected by the war, the U.S. dollar, in accordance with the Bretton Woods Treaty (1944) became the reserve currency for all capitalist countries with a rigid artificial peg of their currencies to the U.S. dollar.
The most important milestone in the history of financial markets of the twentieth century was the introduction of freely floating exchange rates in the late 70s, which led to the formation of the FOREX market in its modern sense. This means that anyone can trade in currencies, and their price is determined as a function of current supply and demand in the market.
After the introduction of floating exchange rates, there was a significant increase in the volume of trading on the FOREX market. FOREX is not a "market" in the traditional sense of the word. It has no single center, it has no specific trading place.
Trading takes place over the phone and through computer terminals simultaneously in hundreds of banks around the world. FOREX unites four regional markets: Asian, European, American and Australian. These markets are over-the-counter (OTC - over-the-counter). They operate around the clock in all countries of the world. The largest center in the world, which carries out currency trading, is London, followed by New York, Tokyo, Singapore.
In each of these centers, operations are usually carried out during the working day. The round-the-clock functioning of the market is ensured due to the fact that trading starts in Asia. Before the end of the working day in the eastern hemisphere, trade opens in London, and at the end of the working day the activity moves from the capital of Great Britain to New York.
Characteristics of the global conversion market
In summary, the main characteristics of the global conversion market are:
- Lack of a specific location - trades are conducted globally;
- No specific operating hours - trades are conducted around the clock;
- No external regulator - prices are determined solely by the interaction of supply and demand;
- The largest number of participants and the largest transaction volumes;
- The fastest and most liquid market - operations are carried out within seconds.
Depending on the terms of fulfillment of obligations, conversion operations are divided into current and term conversion operations. Current conversion operations or spot transactions are exchange of monetary amounts expressed in currencies of different countries at the rate agreed upon at the moment of transaction conclusion with the settlement date on the second business day after the conclusion of the transaction.
The terms of settlement on the second business day are quite convenient for counterparties, because during the current and the next business day it is convenient to process the necessary documentation, make payments and other documents to fulfill the terms of the agreement. In some national currency markets the terms of current transactions may differ.
For current dollar to Canadian dollar (USD/CAD) conversions, the value date will be the next business day, which is due to the territorial proximity of the USA and Canada.
Urgent conversion operations are operations with maturities different from those of current conversion operations. The main urgent conversion operations are outright conversions, conversion and currency swaps.
Outright transactions in turn are also classified into forward and short-term transactions.
Forward transactions (outright forward) are transactions with a settlement term longer than the spot term. Forward transactions are mainly used to hedge the risks of changes in the prices of financial instruments.
Outright short forwardtransactions (outright short) are transactions with a maturity of less than the spot maturity. Transactions in this market are mainly used to maintain current liquidity. Interest-bearing or deposit instruments are a set of short-term (from 1 day to 1 year) operations on placement of free cash balances, as well as attraction of missing funds in foreign currencies for various terms at a certain interest rate.
To designate the deposit market in international practice it is customary to use the designation MM or Money Market. The basic interest-bearing instruments in the foreign exchange market are deposit and credit operations. Derivative currency instruments (derivatives) are contracts (securities), the current value of which is derived from the value of their underlying asset, in this case the national monetary unit or currency.
Such contracts may be resold before their maturity dates. Contracts that obligate both counterparties to perform a transaction with the underlying asset are called futures, and contracts in which one party has the right to refuse such a transaction are called options. In either case, derivatives are automatically canceled when they are repurchased by the issuer.
Currency derivatives can be divided into conversion and deposit (interest rate) derivatives. Interest rate derivatives of the foreign exchange market include interest rate swaps (IRS), forward interest rate agreements (FRAs) and others.
Participants of the foreign exchange market
Depending on the role in the foreign exchange market, its participants can be classified into one of the following categories: market regulators, market issuers, market organizers, market operators and market users.
Regulators of thecurrency market are government agencies that regulate the issue of the national currency of their country, as well as the supply of national and foreign currency.
As a rule, central banks are theissuers of theforeign exchange market. The main purpose of the work of central banks is to protect the interests of the state they represent. The function of central banks includes managing foreign exchange reserves, conducting currency interventions that affect the level of the exchange rate, and regulating the level of interest rates on deposits in the national currency.
Market organizers are intermediaries in conducting trades, concluding transactions and organizing settlements. The main organizers of the foreign exchange market are: information agencies, brokerage firms and exchanges.
Market operators are large banks and financial companies that maintain market liquidity and determine the current pricing policy through a significant share of their operations in the total market volume.
Market users - end users of the currency market, who carry out their operations to solve specific economic or financial tasks. These are primarily exporters and importers, investors, and individual traders.
