The Traditional brokers: What are ther chances in forex?

205 THE TRADITIONAL BROKERS: WHAT ARE THEIR CHANCES IN THE FOREX? Journal of Applied Economics, Vol. VI, No. 2 (Nov 2003), 205-220 THE TRADITIONAL BROKERS: WHAT ARE THEIR CHANCES IN THE FOREX? PAULA C. ALBUQUERQUE* Technical University of Lisbon Submitted... More

205 THE TRADITIONAL BROKERS: WHAT ARE THEIR CHANCES IN THE FOREX? Journal of Applied Economics, Vol. VI, No. 2 (Nov 2003), 205-220 THE TRADITIONAL BROKERS: WHAT ARE THEIR CHANCES IN THE FOREX? PAULA C. ALBUQUERQUE* Technical University of Lisbon Submitted May 2001; accepted August 2002 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. Consid Less