In modern conditions practically all financial transactions in the market are speculative by their nature, and there’s nothing abnormal or criminal in it. One of the most vivid indices of markets’ globalization is their daily volume of exchange transactions. Only in 10 major financial centers it increased from 206 billion dollars in 1986 to 967 billion dollars in 1992. According to the IMF, on the whole the volume is over 1 trillion dollars a day, and on some days it reaches 3 trillions.

It is enough to say that the volume of gold and foreign exchange reserves of all developed countries was only 555.2 billion dollars in 1992, which is two times less than a daily volume of market transactions. According to some calculations, the volume of exchange transactions is 40 times bigger that the daily volume of foreign trade transactions. Therefore, most of the deals are caused not by a commercial necessity, but by financial reasons. And a financial transaction is always caused by the fact that money is looking for some profitable usage.

The international exchange system functioning in the world at the moment develops among people dealing with exchange and financial transactions: the so-called speculative psychology. In the world where exchange rates fluctuate for some per cent every week, where currencies that are considered to be stable can lose 20 to 30 per cent of their cost during a few months, it’s absolutely clear that the manager of a fund, trying to compensate for inevitable losses, has to use speculative operations.

For example, a reasonable owner of dollars has to get rid of them very quickly and exchange them for Euro every time the expected fall of the dollar against Euro surpasses the difference between the profit from American notes and the profit from the respective German notes. For instance, if in the coming months the dollar is expected to fall against the Euro by 6%, and the profit from American notes is 6 per cent bigger than the profit from German notes, a speculator will probably decide to keep dollars. If the gap in the interest rates is less than the expected fall of the rate, the “running away from the dollar” begins. Who are these speculators? An analysis shows that the main speculators acting in the market are institutional investors.

Among them one can single out, first of all, official state institutions, and, secondly, private financial and other institutions. Thus according to the report of the “Group of Ten”, state investors in Europe and Japan keep about 20 per cent of their assets in the form of foreign securities (in the USA only 7.5 per cent). However, the main feature of the 1980s was the growing international activity of private financial institutions: pension funds, insurance companies, and mutual funds. The Globalization of international financial markets is an objective process, reflecting the growing degree of economic relations in the world. It promotes a more effective distribution of financial resources.

Major world exchange markets:

  • AMEX – American Stock Exchange
  • BOVESPA – Sao Paulo Stock Exchange
  • CBOT – Chicago Board of Trade
  • CHX – Chicago Stock Exchange
  • CME – Chicago Mercantile Exchange
  • Commodities on the Web – List of the commodities
  • LIFFE – London International Financial Futures and Options Exchange
  • London Stock Exchange -London Stock Exchange
  • Nasdaq
  • NYMEX – New York Mercantile Exchange
  • NYSE – New York Stock Exchange
  • SBF – la Bourse de Paris
  • SES – Singapore Exchange
  • SET – Stock Exchange of Thailand
  • TSE – Tokyo Stock Exchange
  • TSE – Toronto Stock Exchange
  • LSEX – London Stock Exchange
  • CBOE – Chicago Board Options Exchange CBOE
  • PHLX – Philadelphia Stock Exchange