Question
Why do firms and investors use the FX market to hedge?
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Answer
To reduce currency risk, often with forwards or options.
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Question
How does speculation differ from hedging in the FX market?
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Answer
Speculation seeks profit from currency moves; hedging reduces exposure.
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Question
How does the interbank FX market differ from the client market at a high level?
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Answer
Interbank is dealer-to-dealer wholesale trading; client market serves end users.
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Question
How do retail FX traders differ from large institutional participants?
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Answer
They are smaller and usually face wider bid-ask spreads.
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