Composition Of A Dealing Room

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The composition of an institution's dealing room very much depends on that institution's size, its spread of market interests and its client base (see Figure 18.1). However, in general, the majority of institutions actively involved in the foreign exchange markets will have some or all of the personnel listed below.

18.1.1 Spot dealers

Spot dealers are the dealing section the media love the most. Whenever there is pressure on any currency, that pressure will be most noticeable on the currency's spot value. They are market makers.

18.1.2 Forward dealers

Forward dealers will normally be active market makers in the same major currencies as traded by the spot dealers. Here, rather than dealing on the minute-by-minute value of the currency, forward dealers are looking at the relative currency interest rates over the standard forward period dates quoted by the market.

18.1.3 Money-market dealers

Money-market dealers control the interbank deposit and loan positions of the bank. The interbank market deals in all periods from overnight (depending on currency) to one-year funds and above. They are also responsible for funding the bank's commercial asset portfolio.

18.1.4 Treasury product dealers

Treasury product dealers are involved in numerous other activities, involving other financial instruments and newer off-balance-sheet products. Some of the treasury products lend themselves

Chief dealer

Senior trader

assistance in performing deals completed deal tickets assistance in performing deals completed deal tickets

Position keeper errors to reconcile

Back office

Figure 18.1 Graphic example of the relationship between all the different personnel in a dealing room to trading activities (futures, options, etc.), while others are offered by the treasury products dealers as a customer service in-house, to providing assistance wherever it is needed in the management of all types of financial risk.

18.1.5 Corporate dealers

Corporate dealers undertake a totally different role to that of the interbank dealers. In most situations, they will not make a market, but will instead obtain rates from the market makers in response to their client's dealing requests and quote for those accordingly. They are, in effect, the 'middle men' between the market makers and the clients. In their own right, they have a tremendous marketing role to play as in many respects they are the front-line representatives of the institution.

18.1.6 Research personnel

Research personnel, generally, have a presence on the trading floor because they assist the traders in their task with technical and statistical research, market commentaries and graphical analyses, among other things.

18.1.7 Position clerks

Position clerks are the workhorses of the dealing room, as they tend to carry out all of the clerical functions that require immediate execution.

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