Foreign exchange brokers are agents who facilitate trading between dealers without themselves becoming principals in the transaction. For this service, they charge a small commission. They maintain instant access to hundreds of dealers worldwide via open telephone lines. At times a broker may maintain a dozen or more such lines to a single client bank, with separate lines for different currencies and for spot and forward markets.
It is a broker’s business to know at any moment exactly which dealers want to buy or sell any currency. This knowledge enables the broker to find quickly an opposite party for a client without revealing the identity of either party until after transaction has been agreed upon. Dealers use brokers for speed and because they want to remain anonymous, since the identity of participants may influence short-term quotes.