FX Desks

FX Desks are locations where forex traders and dealers with a financial institution, bank, or investment firm work.

FX desks are commonly structured as a central point that is shared by more than one trader and given the nature of the sleepless 24-hour forex market.

The majority of foreign exchange institutions possess FX desks to meet trading demands.

For large-scale financial institutions, FX desks are generally swapped for a dealing facility.

This is operated by market makers, also known as liquidity providers, or a close-knit network of dealers.

Sometimes, if demand is high enough, there will be multiple FX desks specific to major currencies like the U.S. dollar, euro, and yen.

Forex dealers working at FX desks may operate as an agent or principal.

When forex dealers operate as an agent, the dealer will facilitate a client’s order in a secondary market where more liquidity may be found.

By extension, FX dealers who function as a principal dealer takes the opposing side of a client’s trade.

Evolution of FX Desks

Before the early 2000s, FX desks played a critical role in the operations of forex brokers where it was not uncommon for forex desks to possess 10 to 20 traders.

Today, FX desks are made up of maybe a handful of forex traders due to the innovation and transitioning of electronic trading which began to shift in the mid-2000s.

While the demand to trade forex is greater than it had been, forex dealers have been replaced by electronic auto-hedging platforms that quote and clear trade executions on their trader’s behalf.