The Forex & CFD market
The foreign exchange market, usually referred to as the Forex market, is the biggest and most liquid financial market in the world. Its daily global turnover reached 5.1 trillion US dollars in April 2016, according to the Bank of International Settlements (BIS) triennial report. This accounts for a 20% increase since 2010, when the previous report mentioned an average daily turnover of 4 trillion US dollars.(1)
Although the daily turnover dropped slightly since the last triennial report (from 5.4 trillion US dollars), its consistently high liquidity still proves just how resilient the Forex market really is. Its turnover has experienced almost continuous growth since 2001 and established its position as the most popular and most-traded market worldwide.
A significant difference between the Forex and stock markets is the lack of a centralised, unitary market, unlike the famous New York Stock Exchange's Wall Street. Instead, there are lots of big "market makers" on the Forex market that execute orders on different marketplaces. The biggest among those are usually large banks, which determine the benchmark prices for currencies. According to financial magazines and American consultancy firm Greenwich Associates, the banks with the biggest shares on the global currency market are the German Deutsche Bank, Citigroup, Barclays, UBS, HSBC and JPMorgan.
The most significant Forex market is located in the UK, with London being one of the most important trade centres, handling 37 per cent of all Forex trading in 2016. After London, the next strongest markets are the United States with 19 per cent of the worldwide Forex turnover in 2016, followed by Singapore (8 per cent), Hong Kong SAR (7 per cent) and Japan (6 per cent).(2) By far the most traded currency is - unsurprisingly - the US dollar, leading the competition with 44 per cent of all currency trades. Second and third place are taken by Euro and Japanese Yen, with 16 and 11 per cent respectively. Pound sterling follows behind with only 6 per cent.(3)
The growth in Forex market turnover, reaching 4 trillion in 2010 and almost 5.1 trillion US dollar in 2016, is partially based on an increasing amount of private investors partaking in the currency market. Extensive trading times (round the clock, excluding weekends), high liquidity and leveraged trading are the qualities which attract a wide audience of private traders. Individual and small institutional investors aggregated a daily turnover of around 150 billion dollars in 2010's spot Forex trading. Forex Magnates quantifies the daily currency trading volume of retail clients at 270 billion US dollars around the end of 2011.
Private investors usually trade via so-called "retail providers" – online Forex dealers like the Admiral Markets Group – which simplify Forex trade for private users. According to Greenwich Associates reports, 12 per cent of 2009's worldwide Forex trade were handled by those service providers. In 2010. Their influence dropped slightly but has seen a steady growth since then.
The technological advance of electronic transaction processing has greatly facilitated the increasing number of retail clients as significant participants on the Forex market. Electronic commerce and its mediation reduces transaction costs and increases market liquidity – leading, in turn, to smaller trades becoming more profitable. Additionally, trading with Forex accounts for private users usually comes without order fees. More than 60 per cent of worldwide currency trading is processed electronically, estimates Greenwich Associates in its report from April 2012.
Furthermore, another product group is becoming more and more important in this branch of industry. So-called CFDs, or Contract For Differences, offer retail clients the option to partake in the trade of indices, even with relatively low amounts of invested capital. Similarly to the Forex market, leveraged trading is possible and used to generate large profits with low capital risk.
CFDs allow traders to profit when trading indices on both rising and falling prices, as they allow buy orders and sell orders. Contrary to many other financial products, CFDs do not expire and positions can be held indefinitely.
This is why many private traders prefer CFDs as investment products for popular markets, like the DAX30, Dow Jones or SP500. According to a survey of the Investment Trend Institute in 2016, there have been 50,000 investors involved in CFD products in Germany alone. Compared to the last report, this is an increase of 6%.(4)
Low order fees and spread costs, as well as an extremely user-friendly and easy-to-handle access to index trading, are all important factors for the increasing popularity of CFD products.
About the Admiral Markets Group
Admiral Markets is a global Forex and CFD trading service provider, offering the universally popular and highly accessible trading platforms – MetaTrader 4 and MetaTrader 5 – suitable for both Forex and CFD trading. Via these platforms, Admiral Markets' clients have access to trade a wide variety of Forex pairs, spot metals, leveraged products – such as CFDs, stocks and commodity CFDs.
Admiral Markets currently counts 24 486 active trading accounts – those who engage in at least one trade per year 1. The combined active trading volume of all clients amounts to around 30 billion US dollars.
Since the founding of the company in 2001, Admiral Markets has consistently strived to extended its range of products and now offers its services in 113 countries worldwide. By trading with Admiral Markets AS' companies, clients have the benefit of protection given by financial regulation, as Admiral Markets AS, Admiral Markets PTY and Admiral Markets UK Ltd, are authorised and regulated by their respective supervisory authorities. Admiral Markets employs a staff of more than 200 persons worldwide 2.
Admiral Markets offers countless educational programs for its clients, such as Forex 101 – which allows them to improve their trading knowledge and develop sophisticated trading strategies. Regular, free-of-charge seminars and online webinars – held in several different languages, such as English, German, Spanish and Russian – offer comprehensive training opportunities and clarify the risks and opportunities of Forex and CFD trading. A multitude of books, eBooks, leaflets and articles on Forex and CFD trading, written in more than a dozen different languages, offer an introduction to trading for beginners and also help to convey specific knowledge and technical analyses to experienced traders.
Important key facts about the Admiral Markets Group
- Global Financial Services Provider; Online Brokerage, Forex & CFD Brokerage Services
- Active clients in 113 countries worldwide
- Number of offices: 16
- Around 200 employees worldwide
- 24 486 active trading accounts (active: at least one trade per year)
2017: Onlinebroker-Portal.de award in the category "Best Forex Broker 2017"
2017: Focus Money award in the category "Best/Fairest CFD Broker"
2017: Deutsches Kundeninstitut award in the category "Best Service" at CFD Brokers
2017: Second Place in "Brokerwahl Awards" in the category "Best Forex Broker"
2016: First Place BrokerVergleich.de in the category "CFD Broker"
2016: First Place BrokerVergleich.de in the category "Forex Broker"
2016: Awarded as "CFD Broker 2016" by the Deutsche Kundeninstitut
2016: Second Place in "Brokerwahl" category "Best Forex Broker"
2016: First place "Bester Forex Broker" online-brokerportal.de
2016: FxCuffs - "Best Foreign Broker of the Year"
2016: UK Forex Awards - "Best Forex Educator 2016"
2015: First place "Best Forex Broker" online-brokerportal.de
2015: Zweiter Platz BrokerVergleich.de "Best Forex Broker"
2015: UK Forex Awards - "Best MT4 Broker"
2015: FxCuffs - "Best Foreign Broker of the Year"
2014: "Most Popular Broker" - Forbes Romania
2012: "Best of the Best", Leser des Magazins, The New Europe FX Award
2012: "Best Forex Broker in the Baltic Region", The New Europe FX Award 2012
Brief Company History
- 2001: Opening of the company's first office, on 5 March, in St. Petersburg, Russia – following the registration of Admiral Investments and Securities Ltd.
- 2003: Opening of the new office in Tallinn, Estonia, marking the beginning of the company's expansion Eastern European expansion.
- 2007: The company is renamed Admiral Markets.
- 2009: Admiral Markets is licensed to operate in the EU by the Estonian Financial Supervision Authority (EFSA).
- 2010: Acquisition of Russian broker, UMIS.
- 2011: Expansion to Australia and registration with the Australian Securities & Investments Commission (ASIC).
- 2013: Admiral Markets granted a license by the UK Financial Conduct Authority (FCA).
- 2013: Admiral Markets granted a license by the Cyprus Securities and Exchange Commission (CySEC).
- 2013: September – Admiral Markets unveils a new company logo.
- 2014: Trading account revolution.
- 2015: The Black Swan (Swiss Franc Debacle) event had a deep impact on the entire Forex & CFD industry. This event led to a full revision of all outstanding investment projects. As a result, Admiral Markets decided to focus on its core markets and improve Internal and External Risk Management.
- 2016: Many new products are added to Admiral Markets' offering: CFD improvement, WebTrader, Order Execution statistics, Volatility Protection Setting and many more.
- 2017: Establishment of improved Trading Conditions and Internal Risk Management.
- 2017: Admiral Markets appoints a new management team.