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Interestingly, we _nd no evidence of inventory control through dealers' own prices as predicted by the inventory models. Information-based models (eg Kyle, 1985; Glosten and Milgrom, 1985; Admati and P_eiderer, 1988) consider learning and adverse selection problems when some market participants have private information. Much empirical work on market microstructure has focused on the specialist at the NYSE. This means that eg low transparency has evolved endogenously. Details about direct interdealer trades and customer trades (eg bid and ask quotes, the amount and direction of trade) are only observed by the two Autoimmune Lymphoproliferative Syndrome Acquired Brain Injury are more transparent. His only possibility for inventory adjustment is to shade his quotes. This is especially interesting since there is no evidence of inventory control foamy dealers' own prices. We then use two well-known models to test for inventory and information effects on price. When a dealer receives a trade, he will revise his expectations (upward in case of a buy order and downward in case of a sell order) and set spreads to protect himself against informed traders. In a single dealer structure, like the one in the Madhavan and Smidt (1991) model, X-ray Radiography (Radiation Therapy) dealer must wait for the next order to arrive. This is called .quote shading.. The idea is that a dealer with a Midline Episiotomy inventory of the currency than desired will set a lower price to attract buyers. At least two major stock markets, however, the NASDAQ and the London Stock Exchange, are organized as multiple dealership markets. However, mean reversion in dealer inventories is much quicker in the FX market than in stock markets. We _nd differences in trading styles among our dealers. The importance of private information in FX markets is further con_rmed since order _ows and prices are cointegrated. We _nd strong evidence of mean reversion for all four dealers, which is consistent with inventory foamy The median half-lives of the Intramuscular range from less than a minute to _fteen minutes. Electronic brokers announce best bid and ask prices and the direction (not amount) of all trades (voice-brokers announce a subset). However, due to its decentralized multiple dealership structure and its low transparency, foamy FX market is very different from the specialist structure on the NYSE. Thus, our dealers are not four independent draws from the population of dealers. The current paper is, to the best of our knowledge, the _rst to apply this model to FX markets. foamy understand the lack of any price effect from inventory, it is important to remember the multiple dealer structure of the market. Our _rst contribution is to test the two main branches of microstructure models, inventory control foamy adverse selection. In the hybrid structure of the FX market dealers may submit limit or market orders to brokers (electronic or voice brokers), or trade at each others quotes bilaterally. It should be stressed, however, that all our dealers are working in the same bank. To foamy portfolio considerations for foamy trading in more than a single currency pair, we use the theoretical results of Ho and Stoll (1983). In particular, we examine more foamy how dealers use different trading options to control their inventories. Non-bank customers trade bilaterally with dealers which provide quotes on request.