Characteristic # 7.

“Over-The-Counter” Market
• High unregulated market initiating over the counter trade by the banks through
telex and telephone.
• Regulatory authorities examine the foreign exchange market activities of banks
and certain other institutions participating
• On the “organized exchanges,” foreign exchange products traded are currency
futures and certain currency options.
Disadvantages of Foreign Exchange Market:
• Leverage Risks
• Counterparty Risks
• Operational Risks