Who are the Market Participants?

The list below explains the various market participants who trade in the online market.

About The Various Market Participants

To know more about each of these market trading participants we shall look at the various categories of those taking part in XAUUSD and also discuss how each of these market participants influence the market.

• Banks - Market Participants

These large banks transact billions of dollars daily on behalf of commercial companies, brokers, their xauusd customers and retail traders. Some of these xauusd transaction activity is undertaken on behalf of corporate customers while some activity comes from the banks treasury room which also conducts a large amount of xauusd trading transactions, where dealers are taking their own xauusd positions to make profits.

• Liquidity Providers - Market Participants

These dealers handle large amounts of business, facilitating online xauusd transactions and matching anonymous counterparts for comparatively small fees. With the increased use of the Internet, a lot of this xauusd business is conducted on electronic systems that are highly efficient in connecting many online brokers.

These dealers deal with financial firms or retail trading brokers and provide institutional liquidity to these firms.

XAUUSD Liquidity Providers are therefore major participants in XAUUSD because all of the trades of xauusd investors & retail xauusd traders are passed to these liquidity providers who then offset these orders in the online exchange market. Once traders places orders with their brokers who then pass these orders to the liquidity providers who then place these orders in the online exchange market, in what is known as providing liquidity.

• Commercial Companies - Market Participants

Multinationals & commercial companies taking part in international in XAUUSD for the purpose of xauusd investing as part of their overall investment strategy.

Commercial companies take part so as to invest their money in these markets.

• Retail XAUUSD Brokers - Market Participants

Use of the internet has brought about retail brokers. These offer platforms, xauusd analysis, and strategic advice to customers and will place trades on behalf of their xauusd clients and facilitate these retail xauusd investors who do not have a lot of money. XAUUSD brokers will then provide capital to these retail xauusd investors in the form of xauusd leverage. This group only participates in as far as placing trades on behalf of retail traders.

The brokers will provide bid and ask xauusd quotes, depending on whether a retail xauusd investor wants to buy or sell, the trader will then buy or sell at the current price quotes (bid quote - buyer will buy at this trading price, ask quote - the seller will sell at this price).

The role of this broker group is to only facilitate xauusd transactions between the market and the traders for a small markup called spread. This group does not therefore hold any orders of their own, they just facilitate the xauusd.

• Hedge Funds

Hedge funds use aggressive xauusd speculation methods to make profits. Hedge funds are xauusd investments that are under the management of experts and professional money managers, the size and liquidity of xauusd is very appealing and the leverage available in these markets also allows such funds to invest in with billions of dollars at a time in market.