The Art of Monetary Policy

By David C. Colander; Dewey Daane | Go to book overview

13

SCOTT E. PARDEE


A Trader's View of the Foreign Exchange Market

The foreign exchange market spans the globe, with trading virtually around the clock. The amounts of money exchanged are huge, with close to $1 trillion a day changing hands. It has no central marketplace, and yet it is linked together by modern communications equipment--telephones, telexes, faxes, and computers. At any point in time there may be some 10,000 people around the world at their telephones, at their computer terminals, or in trading pits ready to buy or sell in response to the flow of political events, economic data, and rumors that affect their expectations. The pace is hectic.

Foreign exchange is a collection of international markets in time as well as space. If you want to be paid for goods to be delivered three months from now, or even five years from now, you can arrange to enter into a forward exchange contract with a bank, at a separate exchange rate for that date of delivery in the future, as distinct from a cash trade when the goods are delivered. If you want to invest in D-marks for three months, you can arrange a swap, buying spot marks and selling forward marks, which effectively eliminates your exchange risk. If you wish to speculate, you can trade futures on organized exchanges such as the Chicago Mercantile Exchange, based on the open-cry system developed in the U.S. commodity markets. The gamut of options trades (puts and calls) is also available through the banks and through the organized exchanges. Computers assist at every stage of a transaction--from analyzing a trading strategy to clearing the funds after a trade is done.


The Major Players

Banks are at the center of the foreign exchange market. They clear the dollars, the British pounds, the German marks, and the Japanese yen

-161-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited page

Bookmark this page
The Art of Monetary Policy
Table of contents

Table of contents

Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this book
  • Bookmarks
  • Highlights & Notes
  • Citations
/ 218

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.