Since the forex market is open around-the-clock, many institutions have dealing desks around the world. Dealing desks can also be found outside the foreign exchange marketssuch as in banks and finance companies, to execute trades in securities and other financial products. Dealing desks are not limited to forex.
They execute many financial assets like equities, ETFs, options, and commodities. How a Dealing Desk Works The term "desk" may be a bit of a misnomer, given its connotation of a table shared by a couple of traders.
The dealers are there to facilitate trades on behalf of their customers. They may act as principal or agent. When acting as principal the dealer takes the other side of the client's trade. When acting as agent, the trader will handle a client's order by finding liquidity in the secondary market.
In this case the client will what is a dealing center the same prices executed by the dealer. Because of electronic trading, the number of forex dealers at a desk has declined significantly since the mids.
In the late s, a dealing desk could be made up of 15 to 20 traders, with often multiple people covering the same currency. However, today, your typical forex desk will have less than ten traders, some as few as five with a lot of the business being quoted and cleared by an electronic auto-hedging platform.
The same can be said for equities and ETFs. Many of the manual processes have been automated due to the rise of electronic trading. The market risk team is looking for anomalies and will calculate the value at risk VAR at the end of each day to assess the size of the risk that the bank has at any given time.