Financial Expert: Forex Market Makers Worldwide Earn About $50 Billion Daily

SadaNews - Financial expert Mohamed Salama confirmed that forex market makers around the world, including banks, brokers, and traders, achieve profits of up to about $50 billion daily from their investments in the global foreign exchange market, in addition to operational costs.

Salama stated in an interview with "SadaNews" that this market is high-risk and does not generate money, and therefore any profit made by any entity comes at the expense of another entity's loss.

Salama pointed out that as long as market makers, brokers, operational system costs, trader salaries, and bank profits take the largest share of the profits, it is certain that there are other parties losing, and often individual investors globally are the losing category.

Regarding the Palestinian context, Salama affirmed his support for the steps taken by the Palestinian Capital Market Authority to license several companies in this field, despite the dangers of the market, as it is open to everyone and cannot be stopped.

He noted that licensing companies achieves three objectives:

First: It places companies under the responsibility and oversight of an official authority, thus regulating their operations.

Second: It urges regulatory bodies to guarantee rights for those who are subjected to injustice or fraud.

Third: It brings funds to the public treasury through these companies paying taxes and employing labor.

Salama demanded the necessity of monitoring advertisements issued by various companies operating in the forex market and not selling illusions to the public or practicing deception by convincing them that trading in the market will bring them guaranteed profits, which is untrue.

Salama indicated that about 30-35% of the revenues of banks operating in Palestine come from the exchange rate differentials.

The forex market is considered the largest market in the global financial system, with a trading volume of $8 trillion daily, while the number of traders reaches 15 million.

The Palestinian Capital Market Authority previously confirmed to "SadaNews" that it has indeed received many complaints from traders who have been defrauded due to dealing with unlicensed forex companies and individuals.

The Authority noted that it received complaints from traders with licensed companies regarding the occurrence of slippage during transactions, considering this type of complaint a practical and direct example of market risks, as slippage primarily occurs due to high volatility in the market, especially during major news releases.

The Authority pointed out that prices change faster than the speed of order execution at times. The Authority stated that its role in these cases is to determine whether the slippage that occurred is a natural consequence of market movement, or whether it resulted from unfair practices by the company, in order to ensure the protection of traders' rights.

The Authority clarified that its approach to licensing three companies operating in forex was primarily aimed at controlling the black market, stopping the wastage of funds in the Palestinian market, and combating fraud in this market, indicating that the intervention to grant licenses did not come out of nowhere, but rather aimed at regulation and stopping this hemorrhage.

It emphasized that there was an urgent need for regulation amid the prevailing chaos, asserting that the decision to enter the forex market is an individual decision and not open to companies.

"SadaNews" had covered in a report titled "Forex Market...The Market Whales Swallow Small Fish", which highlighted the risks of investing in this market, pointing out the importance of resorting to trading through companies licensed by official authorities in case an individual decides to invest in it, as they are subject to the oversight of the Capital Market Authority, which sets various conditions and regulations to protect traders.