When the financial press talks about the foreign exchange market in general it refers to the wholesale tier. The spot market is the exchange market for payment and delivery today . In a forward transaction the settlement date is deferred much further into the future than in a spot transaction, and no cash moves on either side until that settlement date. The difference between the bid and the ask is the spread . Market makers make a profit from the bid-ask spread.
Commercial banks account for the largest proportion of total trading volume.
About three quarters of all foreign exchange trading is between banks. These transactions are called interbank or direct dealing transactions. Direct dealing saves the commission charged by brokers. This raw data is validated with consideration to frequency, unusual peaks, possible errors, etc. The average of these filtered bid and ask prices over a certain period of time is called median price .