news

until they could exit them profitability.
With regulations now limiting this, and transactions being offset immediately into the market,
traders risk being dealt a position that might run against the profitability of their trading book,
potentially enticing them to look for ways to mitigate their losses or, in the case of greed, to
maximise profits.
“We did a big corporate trade where a number of banks knew we were going to execute the
trade and the currency started moving in the morning,” says the foreign exchange
derivatives broker.
It is largely sizeable institutional and corporate clients, buying and selling large amounts of
foreign exchange, that stand to be most prejudiced by collusion practices, says Glynos. “A
small negative skew in the price can still translate into significant opportunity cost in nominal
rand terms for the client.
“With respect to the value of the rand, there is unlikely to be any material impact.”