Foreign Exchange
Currencies trade as base/quote pairs, with dollar legs and crosses making FX the largest and most fragmented market in the world.
Foreign exchange is the largest market on earth, with trillions of dollars of daily turnover mostly dealer to dealer. Currencies trade in pairs with a base/quote convention: EUR/USD at 1.10 means one euro buys 1.10 dollars. The cross EUR/GBP is synthesized through the dollar legs, which is why major pairs carry the liquidity. Spot settles in one or two days; forwards and swaps extend the same quoting convention across maturities and dominate turnover. FX matters to quants beyond currency trading itself: it supplies the translation between assets and numeraires, and its microstructure (no single exchange, a fragmented dealer network) is a model for how over-the-counter markets price everything.