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The Traditional Brokers: What are their Chances in the Forex?

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  • Paula C. Albuquerque

    (Technical University of Lisbon)

Abstract

The electronic brokers compete with the traditional brokers. The electronic brokers offer lower costs, increased speed and a better guarantee of transparency and of anonymity. The : only real advantage of the traditional brokers is the gathering of information. We investigate : whether the traders in the foreign exchange market consider that to be crucial, which is : equivalent to asking “Do traditional brokers have any chance in the forex?” We build a : simple model and use the results of a questionnaire that we elaborated and that was sent to : the users of the brokers’ services in the Portuguese foreign exchange market. We also use : transaction data from the most important dealer in the Portuguese market. Considering this : dealer to be representative, we conclude that the main advantage of the traditional broker : is not much valued by the dealers. This does not leave a promising future for the traditional : broker. :

Suggested Citation

  • Paula C. Albuquerque, 2003. "The Traditional Brokers: What are their Chances in the Forex?," Journal of Applied Economics, Universidad del CEMA, vol. 6, pages 205-220, November.
    • Handle: RePEc:cem:jaecon:v:6:y:2003:n:2:p:205-220
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    More about this item

    Keywords

    brokers; foreign exchange market; information;
    All these keywords.

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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