The ten most active traders account for 77% of trading volume

The ten most active traders account for 77% of trading volume, according to the 2010 Euromoney FX survey. These large international banks continually provide the market with both bid  and ask  prices. The bid/ask spread is the difference between the price at which a bank or market maker will sell and the price at which a market taker will buy ("bid") from a wholesale or retail customer. The customer will buy from the market-maker at the higher "ask" price, and will sell at the lower "bid" price, thus giving up the "spread" as the cost of completing the trade. This spread is minimal for actively traded pairs of currencies, usually 0–3 pips. For example, the bid/ask quote of EURUSD might be 1.2200/1.2203 on a wholesale broker. Minimum trading size for most deals is usually 100,000 units of base currency, which is a standard "lot".
These spreads might not apply to retail customers at banks, which will routinely mark up the difference to say 1.2100/1.2300 for transfers, or say 1.2000/1.2400 for banknotes or travelers checks. Spot prices at market makers vary, but on EURUSD are usually no more than 3 pips wide. Competition is greatly increased with larger transactions, and pip spreads shrink on the major pairs to as little as 1 to 2 pips.

posted by ramarao