Interbank currency forwards do more notional volume in one day than the entire market cap of the NYSE. That's serious liquidity. On the other hand, call your broker and tell him you want to do an Interbank trade and he will laugh at you which is really poor liquidity. Go figure.
JoeyDVivre Wrote:
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> Interbank currency forwards do more notional
> volume in one day than the entire market cap of
> the NYSE. That's serious liquidity. On the other
> hand, call your broker and tell him you want to do
> an Interbank trade and he will laugh at you which
> is really poor liquidity. Go figure.
I will do as many as you want. 10MM minimum notional with 1.5MM collateral for daily mark to market.
I have seen them for 2-5MM but in that case you are better off using the futures market, because the counterparty bank is going to rip you.
Edited 1 time(s). Last edit at Tuesday, May 24, 2011 at 09:57AM by Paraguay.
OTC forwards dominate the markets, but when I think about liquidity (the ability to sell w/o losing value) I feel like futures are more liquid based on the standardized contract and exchanges they trade on.