The foreign exchange market (forex, FX, or currency market) is a worldwide decentralized over-the-counter financial market for the trading of currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies.

The primary purpose of the foreign exchange is to assist international trade and investment, by allowing businesses to convert one currency to another currency. For example, it permits a US business to import British goods and pay Pound Sterling, even though the business's income is in US dollars. It also supports speculation, and facilitates the carry trade, in which investors borrow low-yielding currencies and lend (invest in) high-yielding currencies, and which (it has been claimed) may lead to loss of competitiveness in some countries.

In a typical foreign exchange transaction, a party purchases a quantity of one currency by paying a quantity of another currency. The modern foreign exchange market began forming during the 1970s when countries gradually switched to floating exchange rates from the previous exchange rate regime, which remained fixed as per the Bretton Woods system.

The foreign exchange market is unique because of

its huge trading volume, leading to high liquidity;

its geographical dispersion;

its continuous operation: 24 hours a day except weekends, i.e. trading from 20:15 GMT on Sunday until 22:00 GMT Friday;

the variety of factors that affect exchange rates;

the low margins of relative profit compared with other markets of fixed income; and

the use of leverage to enhance profit margins with respect to account size.

As such, it has been referred to as the market closest to the ideal of perfect competition, notwithstanding currency intervention by central banks. According to the Bank for International Settlements, Of this $3.98 trillion, $1.5 trillion was spot foreign exchange transactions and $2.5 trillion was traded in outright forwards, FX swaps and other currency derivatives.

Trading in London accounted for 36.7% of the total, making London by far the most important global center for foreign exchange trading. In second and third places respectively, trading in New York City accounted for 17.9%, and Tokyo accounted for 6.2%.

Turnover of exchange-traded foreign exchange futures and options have grown rapidly in recent years, reaching $166 billion in April 2010 (double the turnover recorded in April 2007). Exchange-traded currency derivatives represent 4% of OTC foreign exchange turnover. FX futures contracts were introduced in 1972 at the Chicago Mercantile Exchange and are actively traded relative to most other futures contracts.

Most developed countries permit the trading of FX derivative products (like currency futures and options on currency futures) on their exchanges. All these developed countries already have fully convertible capital accounts. A number of emerging countries do not permit FX derivative products on their exchanges in view of controls on the capital accounts. The use of foreign exchange derivatives is growing in many emerging economies. Countries such as Korea, South Africa, and India have established currency futures exchanges, despite having some controls on the capital account.;

Foreign exchange trading increased by 20% between April 2007 and April 2010 and has more than doubled since 2004. The increase in turnover is due to a number of factors: the growing importance of foreign exchange as an asset class, the increased trading activity of high-frequency traders, and the emergence of retail investors as an important market segment. The growth of electronic execution methods and the diverse selection of execution venues have lowered transaction costs, increased market liquidity, and attracted greater participation from many customer types. In particular, electronic trading via online portals has made it easier for retail traders to trade in the foreign exchange market. By 2010, retail trading is estimated to account for up to 10% of spot FX turnover, or $150 billion per day (see retail trading platforms).

Because foreign exchange is an OTC market where brokers/dealers negotiate directly with one another, there is no central exchange or clearing house. The biggest geographic trading centre is the UK, primarily London, which according to TheCityUK estimates has increased its share of global turnover in traditional transactions from 34.6% in April 2007 to 36.7% in April 2010. Due to London's dominance in the market, a particular currency's quoted price is usually the London market price. For instance, when the IMF calculates the value of its SDRs every day, they use the London market prices at noon that day.

Market participants

Unlike a stock market, the foreign exchange market is divided into levels of access. At the top is the inter-bank market, which is made up of the largest commercial banks and securities dealers. Within the inter-bank market, spreads, which are the difference between the bid and ask prices, are razor sharp and not known to players outside the inner circle. The difference between the bid and ask prices widens (for example from 0-1 pip to 1-2 pips for a currencies such as the EUR) as you go down the levels of access. This is due to volume. If a trader can guarantee large numbers of transactions for large amounts, they can demand a smaller difference between the bid and ask price, which is referred to as a better spread. The levels of access that make up the foreign exchange market are determined by the size of the "line" (the amount of money with which they are trading). The top-tier interbank market accounts for 53% of all transactions. After that there are usually smaller banks, followed by large multi-national corporations (which need to hedge risk and pay employees in different countries), large hedge funds, and even some of the retail FX market makers. According to Galati and Melvin, “Pension funds, insurance companies, mutual funds, and other institutional investors have played an increasingly important role in financial markets in general, and in FX markets in particular, since the early 2000s.” (2004) In addition, he notes, “Hedge funds have grown markedly over the 2001–2004 period in terms of both number and overall size”. Central banks also participate in the foreign exchange market to align currencies to their economic needs.

Banks

The interbank market caters for both the majority of commercial turnover and large amounts of speculative trading every day. A large bank may trade billions of dollars daily. Some of this trading is undertaken on behalf of customers, but much is conducted by proprietary desks, trading for the bank's own account. Until recently, foreign exchange brokers did large amounts of business, facilitating interbank trading and matching anonymous counterparts for large fees. Today, however, much of this business has moved on to more efficient electronic systems. The broker squawk box lets traders listen in on ongoing interbank trading and is heard in most trading rooms, but turnover is noticeably smaller than just a few years ago.

Commercial companies

An important part of this market comes from the financial activities of companies seeking foreign exchange to pay for goods or services. Commercial companies often trade fairly small amounts compared to those of banks or speculators, and their trades often have little short term impact on market rates. Nevertheless, trade flows are an important factor in the long-term direction of a currency's exchange rate. Some multinational companies can have an unpredictable impact when very large positions are covered due to exposures that are not widely known by other market participants.

Central banks

National central banks play an important role in the foreign exchange markets. They try to control the money supply, inflation, and/or interest rates and often have official or unofficial target rates for their currencies. They can use their often substantial foreign exchange reserves to stabilize the market. Nevertheless, the effectiveness of central bank "stabilizing speculation" is doubtful because central banks do not go bankrupt if they make large losses, like other traders would, and there is no convincing evidence that they do make a profit trading.

Forex Fixing

Forex fixing is the daily monetary exchange rate fixed by the national bank of each country. The idea is that central banks use the fixing time and exchange rate to evaluate behavior of their currency. Fixing exchange rates reflects the real value of equilibrium in the forex market. Banks, dealers and online foreign exchange traders use fixing rates as a trend indicator.

The mere expectation or rumor of central bank intervention might be enough to stabilize a currency, but aggressive intervention might be used several times each year in countries with a dirty float currency regime. Central banks do not always achieve their objectives. The combined resources of the market can easily overwhelm any central bank. Several scenarios of this nature were seen in the 1992–93 ERM collapse, and in more recent times in Southeast Asia.

Hedge funds as speculators

About 70% to 90% of the foreign exchange transactions are speculative. In other words, the person or institution that bought or sold the currency has no plan to actually take delivery of the currency in the end; rather, they were solely speculating on the movement of that particular currency. Hedge funds have gained a reputation for aggressive currency speculation since 1996. They control billions of dollars of equity and may borrow billions more, and thus may overwhelm intervention by central banks to support almost any currency, if the economic fundamentals are in the hedge funds' favor.

Investment management firms

Investment management firms (who typically manage large accounts on behalf of customers such as pension funds and endowments) use the foreign exchange market to facilitate transactions in foreign securities. For example, an investment manager bearing an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases.

Some investment management firms also have more speculative specialist currency overlay operations, which manage clients' currency exposures with the aim of generating profits as well as limiting risk. Whilst the number of this type of specialist firms is quite small, many have a large value of assets under management (AUM), and hence can generate large trades.

Retail foreign exchange brokers

Retail traders (individuals) constitute a growing segment of this market, both in size and importance. Currently, they participate indirectly through brokers or banks. Retail brokers, while largely controlled and regulated in the USA by the CFTC and NFA have in the past been subjected to periodic foreign exchange scams. To deal with the issue, the NFA and CFTC began (as of 2009) imposing stricter requirements, particularly in relation to the amount of Net Capitalization required of its members. As a result many of the smaller, and perhaps questionable brokers are now gone.

There are two main types of retail FX brokers offering the opportunity for speculative currency trading: brokers and dealers or market makers. Brokers serve as an agent of the customer in the broader FX market, by seeking the best price in the market for a retail order and dealing on behalf of the retail customer. They charge a commission or mark-up in addition to the price obtained in the market. Dealers or market makers, by contrast, typically act as principal in the transaction versus the retail customer, and quote a price they are willing to deal at—the customer has the choice whether or not to trade at that price.

In assessing the suitability of an FX trading service, the customer should consider the ramifications of whether the service provider is acting as principal or agent. When the service provider acts as agent, the customer is generally assured of a known cost above the best inter-dealer FX rate. When the service provider acts as principal, no commission is paid, but the price offered may not be the best available in the market—since the service provider is taking the other side of the transaction, a conflict of interest may occur.

Non-bank foreign exchange companies

Non-bank foreign exchange companies offer currency exchange and international payments to private individuals and companies. These are also known as foreign exchange brokers but are distinct in that they do not offer speculative trading but currency exchange with payments. I.e., there is usually a physical delivery of currency to a bank account. Send Money Home offers an in-depth comparison into the services offered by all the major non-bank foreign exchange companies.

It is estimated that in the UK, 14% of currency transfers/payments are made via Foreign Exchange Companies. These companies' selling point is usually that they will offer better exchange rates or cheaper payments than the customer's bank. These companies differ from Money Transfer/Remittance Companies in that they generally offer higher-value services.

Money transfer/remittance companies

Money transfer companies/remittance companies perform high-volume low-value transfers generally by economic migrants back to their home country. In 2007, the Aite Group estimated that there were $369 billion of remittances (an increase of 8% on the previous year). The four largest markets (India, China, Mexico and the Philippines) receive $95 billion. The largest and best known provider is Western Union with 345,000 agents globally followed by UAE Exchange & Financial Services Ltd.

Trading characteristics

There is no unified or centrally cleared market for the majority of FX trades, and there is very little cross-border regulation. Due to the over-the-counter (OTC) nature of currency markets, there are rather a number of interconnected marketplaces, where different currencies instruments are traded. This implies that there is not a single exchange rate but rather a number of different rates (prices), depending on what bank or market maker is trading, and where it is. In practice the rates are often very close, otherwise they could be exploited by arbitrageurs instantaneously. Due to London's dominance in the market, a particular currency's quoted price is usually the London market price. A joint venture of the Chicago Mercantile Exchange and Reuters, called Fxmarketspace opened in 2007 and aspired but failed to the role of a central market clearing mechanism.

The main trading center is London, but New York, Tokyo, Hong Kong and Singapore are all important centers as well. Banks throughout the world participate. Currency trading happens continuously throughout the day; as the Asian trading session ends, the European session begins, followed by the North American session and then back to the Asian session, excluding weekends.

Fluctuations in exchange rates are usually caused by actual monetary flows as well as by expectations of changes in monetary flows caused by changes in gross domestic product (GDP) growth, inflation (purchasing power parity theory), interest rates (interest rate parity, Domestic Fisher effect, International Fisher effect), budget and trade deficits or surpluses, large cross-border M&A; deals and other macroeconomic conditions. Major news is released publicly, often on scheduled dates, so many people have access to the same news at the same time. However, the large banks have an important advantage; they can see their customers' order flow.

Currencies are traded against one another. Each currency pair thus constitutes an individual trading product and is traditionally noted XXXYYY or XXX/YYY, where XXX and YYY are the ISO 4217 international three-letter code of the currencies involved. The first currency (XXX) is the base currency that is quoted relative to the second currency (YYY), called the counter currency (or quote currency). For instance, the quotation EURUSD (EUR/USD) 1.5465 is the price of the euro expressed in US dollars, meaning 1 euro = 1.5465 dollars. The market convention is to quote most exchange rates against the USD with the US dollar as the base currency (eg USDJPY, USDCAD, USDCHF). The exceptions are the British pound (GBP), Australian dollar (AUD), the New Zealand dollar (NZD) and the euro (EUR) where the USD is the counter currency (eg GBPUSD, AUDUSD, NZDUSD, EURUSD).

The factors affecting XXX will affect both XXXYYY and XXXZZZ. This causes positive currency correlation between XXXYYY and XXXZZZ.

On the spot market, according to the 2010 Triennial Survey, the most heavily traded bilateral currency pairs were:

EURUSD: 28%

USDJPY: 14%

GBPUSD (also called cable): 9%

and the US currency was involved in 84.9% of transactions, followed by the euro (39.1%), the yen (19.0%), and sterling (12.9%) (see table). Volume percentages for all individual currencies should add up to 200%, as each transaction involves two currencies.

Trading in the euro has grown considerably since the currency's creation in January 1999, and how long the foreign exchange market will remain dollar-centered is open to debate. Until recently, trading the euro versus a non-European currency ZZZ would have usually involved two trades: EURUSD and USDZZZ. The exception to this is EURJPY, which is an established traded currency pair in the interbank spot market. As the dollar's value has eroded during 2008, interest in using the euro as reference currency for prices in commodities (such as oil), as well as a larger component of foreign reserves by banks, has increased dramatically. Transactions in the currencies of commodity-producing countries, such as AUD, NZD, CAD, have also increased.

Determinants of FX rates

The following theories explain the fluctuations in FX rates in a floating exchange rate regime (In a fixed exchange rate regime, FX rates are decided by its government):

:(a) International parity conditions: Relative Purchasing Power Parity, interest rate parity, Domestic Fisher effect, International Fisher effect. Though to some extent the above theories provide logical explanation for the fluctuations in exchange rates, yet these theories falter as they are based on challengeable assumptions [e.g., free flow of goods, services and capital] which seldom hold true in the real world.

:(b) Balance of payments model (see exchange rate): This model, however, focuses largely on tradable goods and services, ignoring the increasing role of global capital flows. It failed to provide any explanation for continuous appreciation of dollar during 1980s and most part of 1990s in face of soaring US current account deficit.

:(c) Asset market model (see exchange rate): views currencies as an important asset class for constructing investment portfolios. Assets prices are influenced mostly by people’s willingness to hold the existing quantities of assets, which in turn depends on their expectations on the future worth of these assets. The asset market model of exchange rate determination states that “the exchange rate between two currencies represents the price that just balances the relative supplies of, and demand for, assets denominated in those currencies.”

None of the models developed so far succeed to explain FX rates levels and volatility in the longer time frames. For shorter time frames (less than a few days) algorithm can be devised to predict prices. Large and small institutions and professional individual traders have made consistent profits from it. It is understood from above models that many macroeconomic factors affect the exchange rates and in the end currency prices are a result of dual forces of demand and supply. The world's currency markets can be viewed as a huge melting pot: in a large and ever-changing mix of current events, supply and demand factors are constantly shifting, and the price of one currency in relation to another shifts accordingly. No other market encompasses (and distills) as much of what is going on in the world at any given time as foreign exchange.

Supply and demand for any given currency, and thus its value, are not influenced by any single element, but rather by several. These elements generally fall into three categories: economic factors, political conditions and market psychology.

Economic factors

These include: (a)economic policy, disseminated by government agencies and central banks, (b)economic conditions, generally revealed through economic reports, and other economic indicators.

Economic policy comprises government fiscal policy (budget/spending practices) and monetary policy (the means by which a government's central bank influences the supply and "cost" of money, which is reflected by the level of interest rates).

Government budget deficits or surpluses: The market usually reacts negatively to widening government budget deficits, and positively to narrowing budget deficits. The impact is reflected in the value of a country's currency.

Balance of trade levels and trends: The trade flow between countries illustrates the demand for goods and services, which in turn indicates demand for a country's currency to conduct trade. Surpluses and deficits in trade of goods and services reflect the competitiveness of a nation's economy. For example, trade deficits may have a negative impact on a nation's currency.

Inflation levels and trends: Typically a currency will lose value if there is a high level of inflation in the country or if inflation levels are perceived to be rising. This is because inflation erodes purchasing power, thus demand, for that particular currency. However, a currency may sometimes strengthen when inflation rises because of expectations that the central bank will raise short-term interest rates to combat rising inflation.

Economic growth and health: Reports such as GDP, employment levels, retail sales, capacity utilization and others, detail the levels of a country's economic growth and health. Generally, the more healthy and robust a country's economy, the better its currency will perform, and the more demand for it there will be.

Productivity of an economy: Increasing productivity in an economy should positively influence the value of its currency. Its effects are more prominent if the increase is in the traded sector .

Political conditions

Internal, regional, and international political conditions and events can have a profound effect on currency markets.

All exchange rates are susceptible to political instability and anticipations about the new ruling party. Political upheaval and instability can have a negative impact on a nation's economy. For example, destabilization of coalition governments in Pakistan and Thailand can negatively affect the value of their currencies. Similarly, in a country experiencing financial difficulties, the rise of a political faction that is perceived to be fiscally responsible can have the opposite effect. Also, events in one country in a region may spur positive/negative interest in a neighboring country and, in the process, affect its currency.

Market psychology

Market psychology and trader perceptions influence the foreign exchange market in a variety of ways: Flights to quality: Unsettling international events can lead to a "flight to quality," with investors seeking a "safe haven." There will be a greater demand, thus a higher price, for currencies perceived as stronger over their relatively weaker counterparts. The U.S. dollar, Swiss franc and gold have been traditional safe havens during times of political or economic uncertainty. Long-term trends: Currency markets often move in visible long-term trends. Although currencies do not have an annual growing season like physical commodities, business cycles do make themselves felt. Cycle analysis looks at longer-term price trends that may rise from economic or political trends. "Buy the rumor, sell the fact": This market truism can apply to many currency situations. It is the tendency for the price of a currency to reflect the impact of a particular action before it occurs and, when the anticipated event comes to pass, react in exactly the opposite direction. This may also be referred to as a market being "oversold" or "overbought". To buy the rumor or sell the fact can also be an example of the cognitive bias known as anchoring, when investors focus too much on the relevance of outside events to currency prices.

Economic numbers: While economic numbers can certainly reflect economic policy, some reports and numbers take on a talisman-like effect: the number itself becomes important to market psychology and may have an immediate impact on short-term market moves. "What to watch" can change over time. In recent years, for example, money supply, employment, trade balance figures and inflation numbers have all taken turns in the spotlight.

Technical trading considerations: As in other markets, the accumulated price movements in a currency pair such as EUR/USD can form apparent patterns that traders may attempt to use. Many traders study price charts in order to identify such patterns.

Algorithmic trading in foreign exchange

Electronic trading is growing in the FX market, and algorithmic trading is becoming much more common. According to financial consultancy Celent estimates, by 2008 up to 25% of all trades by volume will be executed using algorithm, up from about 18% in 2005.

Financial instruments

Spot

A spot transaction is a two-day delivery transaction (except in the case of trades between the US Dollar, Canadian Dollar, Turkish Lira, EURO and Russian Ruble, which settle the next business day), as opposed to the futures contracts, which are usually three months. This trade represents a “direct exchange” between two currencies, has the shortest time frame, involves cash rather than a contract; and interest is not included in the agreed-upon transaction.

Forward

One way to deal with the foreign exchange risk is to engage in a forward transaction. In this transaction, money does not actually change hands until some agreed upon future date. A buyer and seller agree on an exchange rate for any date in the future, and the transaction occurs on that date, regardless of what the market rates are then. The duration of the trade can be one day, a few days, months or years. Usually the date is decided by both parties. Then the forward contract is negotiated and agreed upon by both parties.

Swap

The most common type of forward transaction is the FX swap. In an FX swap, two parties exchange currencies for a certain length of time and agree to reverse the transaction at a later date. These are not standardized contracts and are not traded through an exchange.

Future

Foreign currency futures are exchange traded forward transactions with standard contract sizes and maturity dates — for example, $1000 for next November at an agreed rate ,. Futures are standardized and are usually traded on an exchange created for this purpose. The average contract length is roughly 3 months. Futures contracts are usually inclusive of any interest amounts.

Option

A foreign exchange option (commonly shortened to just FX option) is a derivative where the owner has the right but not the obligation to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date. The FX options market is the deepest, largest and most liquid market for options of any kind in the world..

Speculation

Controversy about currency speculators and their effect on currency devaluations and national economies recurs regularly. Nevertheless, economists including Milton Friedman have argued that speculators ultimately are a stabilizing influence on the market and perform the important function of providing a market for hedgers and transferring risk from those people who don't wish to bear it, to those who do. Other economists such as Joseph Stiglitz consider this argument to be based more on politics and a free market philosophy than on economics.

Large hedge funds and other well capitalized "position traders" are the main professional speculators. According to some economists, individual traders could act as "noise traders" and have a more destabilizing role than larger and better informed actors.

Currency speculation is considered a highly suspect activity in many countries. While investment in traditional financial instruments like bonds or stocks often is considered to contribute positively to economic growth by providing capital, currency speculation does not; according to this view, it is simply gambling that often interferes with economic policy. For example, in 1992, currency speculation forced the Central Bank of Sweden to raise interest rates for a few days to 500% per annum, and later to devalue the krona. Former Malaysian Prime Minister Mahathir Mohamad is one well known proponent of this view. He blamed the devaluation of the Malaysian ringgit in 1997 on George Soros and other speculators.

Gregory J. Millman reports on an opposing view, comparing speculators to "vigilantes" who simply help "enforce" international agreements and anticipate the effects of basic economic "laws" in order to profit.

In this view, countries may develop unsustainable financial bubbles or otherwise mishandle their national economies, and foreign exchange speculators made the inevitable collapse happen sooner. A relatively quick collapse might even be preferable to continued economic mishandling, followed by an eventual, larger, collapse. Mahathir Mohamad and other critics of speculation are viewed as trying to deflect the blame from themselves for having caused the unsustainable economic conditions.

Risk aversion in forex

Risk aversion in the forex is a kind of trading behavior exhibited by the foreign exchange market when a potentially adverse event happens which may affect market conditions. This behavior is caused when risk averse traders liquidate their positions in risky assets and shift the funds to less risky assets due to uncertainty.

In the context of the forex market, traders liquidate their positions in various currencies to take up positions in safe haven currencies, such as the US Dollar. Sometimes, the choice of a safe haven currency is more of a choice based on prevailing sentiments rather than one of economic statistics. An example would be the Financial Crisis of 2008. The value of equities across world fell while the US Dollar strengthened (see Fig.1). This happened despite the strong focus of the crisis in the USA.

See also

Balance of trade

Bretton Woods system

Currency pair

Currency strength

Foreign currency mortgage

Foreign exchange controls

Foreign exchange hedge

Foreign exchange reserves

Foreign exchange scam

Foreign exchange swap

Nonfarm payrolls

Special Drawing Rights

Tobin Tax

World currency

Currency codes

money market

Notes

External links

A user's guide to the Triennial Central Bank Survey of foreign exchange market activity, Bank for International Settlements

London Foreign Exchange Committee with links (on right) to committees in NY, Tokyo, Canada, Australia, HK, Singapore

United States Federal Reserve daily update of exchange rates

Bank of Canada historical (10-year) currency converter and data download

Microstructure effects, bid-ask spreads and volatility in the spot foreign exchange market pre and post-EMU

OECD Exchange rate statistics (monthly averages)

"Lessons for the foreign exchange market from the global financial crisis" Two experts review how global FX markets coped after Lehman's bankruptcy in Sept 2008

Name	Shahrukh Khan
Other names	Shah Rukh Khan, King Khan, SRK‎
Birth date	November 02, 1965
Birth place	New Delhi, India
Years active	1988–present
Spouse	Gauri Khan (1991–present)
Occupation	Actor, producer, television presenter

Shahrukh Khan (}}, ; born 2 November 1965), calling himself and often (for instance on all his DVDs) being credited as Shah Rukh Khan, is an Indian film actor and a prominent Bollywood figure, as well as a film producer and television host. Khan began his career appearing in several television serials in the late 1980s. He made his film debut in Deewana (1992). Since then, he has been part of numerous commercially successful films and has earned critical acclaim for many of his performances. Khan has won thirteen Filmfare Awards for his work in Indian films, seven of which are in the Best Actor category, thus establishing himself as one of the leading actors of Hindi Cinema. In 2005, the Government of India honoured him with the Padma Shri for his contributions towards Indian Cinema.

Khan's films such as Dilwale Dulhaniya Le Jayenge (1995), Kuch Kuch Hota Hai (1998), Chak De India (2007), Om Shanti Om (2007) and Rab Ne Bana Di Jodi (2008) remain some of Bollywood's biggest hits, while films like Kabhi Khushi Kabhie Gham (2001), Kal Ho Naa Ho (2003), Veer-Zaara (2004), Kabhi Alvida Naa Kehna (2006) and My Name Is Khan (2010) have been top-grossing Indian productions in the overseas markets, making him one of the most successful actors of India. Since 2000, Khan branched out into film production and television presenting as well. He is the founder/owner of two production companies, Dreamz Unlimited and Red Chillies Entertainment. Khan is today considered to be the world's biggest movie star, and a net worth estimated at over Rs 2500 crore (US$ 540 million). In 2008, Newsweek named him one of the 50 most powerful people in the world.

Biography

in New Delhi where he won the school's highest accolade, The Sword of Honour. ]] Khan was born in 1965 to Muslim parents of Pathan descent in New Delhi, India. His father, Taj Mohammed Khan, was an Indian independence activist from Peshawar, British India. According to Khan, his paternal grandfather was originally from Afghanistan. His mother, Lateef Fatima, was the adopted daughter of Major General Shah Nawaz Khan of the Janjua Rajput clan, who served as a General in the Indian National Army of Subash Chandra Bose. Khan's father came to New Delhi from Qissa Khawani Bazaar in Peshawar before the partition of India, while his mother's family came from Rawalpindi, British India. Khan has an elder sister named Shehnaz.

Growing up in Rajendra Nagar neighbourhood, Khan attended St. Columba's School where he was accomplished in sports, drama, and academics. He won the Sword of Honour, an annual award given to the student who best represents the spirit of the school. Khan later attended the Hansraj College (1985–1988) and earned his Bachelors degree in Economics (honors). Though he pursued a Masters Degree in Mass Communications at Jamia Millia Islamia, he later opted out to make his career in Bollywood.

After the death of his parents, Khan moved to Mumbai in 1991. In that same year, before any of his films were released, he married Gauri Chibber, a Hindu, in a traditional Hindu wedding ceremony on 25 October 1991. They have two children, son Aryan (b. 1997) and daughter Suhana (b. 2000). According to Khan, while he strongly believes in Allah, he also values his wife's religion. At home, his children follow both religions, with the Qur'an being situated next to the Hindu deities.

In 2005, Nasreen Munni Kabir produced a two-part documentary on Khan, titled The Inner and Outer World of Shah Rukh Khan. Featuring his 2004 Temptations concert tour, the film contrasted Khan's inner world of family and daily life with the outer world of his work. The book Still Reading Khan, which details his family life, was released in 2006. Another book by Anupama Chopra, King of Bollywood: Shahrukh Khan and the seductive world of Indian cinema, was released in 2007. It describes the world of Bollywood through Khan's life.

Film career

Background

Khan studied acting under celebrated Theatre Director Barry John at Delhi's Theatre Action Group (TAG). In 2007, John commented thus on his former pupil that, "The credit for the phenomenally successful development and management of Shahrukh's career goes to the superstar himself." Khan made his acting debut in 1988 when he appeared in the television series, Fauji, playing the role of Commando Abhimanyu Rai. He went on to appear in several other television serials, most notably in the 1989 serial, Aziz Mirza's Circus, which depicted the life of circus performers. The same year, Khan also had a minor role in the made-for-television English-language film, In Which Annie Gives it Those Ones, which was based on life at Delhi University and was written by Arundhati Roy.

1990s

Upon moving from New Delhi to Mumbai in 1991, Khan made his Bollywood movie debut in Deewana (1992). The movie became a box office hit, and launched his career in Bollywood. His performance won him a Filmfare Best Male Debut Award. He went on to star in Maya Memsaab, which generated some controversy because of his appearance in an "explicit" sex scene in the movie.

In 1993, Khan won acclaim for his performances in villainous roles as an obsessive lover and a murderer, respectively, in the box office hits, Darr and Baazigar. Darr marked his first collaboration with renowned film-maker Yash Chopra and his banner Yash Raj Films, the largest production company in Bollywood. Baazigar, which saw Khan portraying an ambiguous avenger who murders his girlfriend, shocked its Indian audience with an unexpected violation of the standard Bollywood formula. His performance won him his first Filmfare Best Actor Award. In that same year, Khan played the role of a young musician in Kundan Shah's Kabhi Haan Kabhi Naa, a performance that earned him a Filmfare Critics Award for Best Performance. Khan maintains that this is his all-time favourite among the movies he has acted in. In 1994, Khan once again played an obsessive lover/psycho's role in Anjaam, co-starring alongside Madhuri Dixit. Though the movie was not a box office success, Khan's performance earned him the Filmfare Best Villain Award.

In 1995, Khan starred in Aditya Chopra's directorial debut Dilwale Dulhania Le Jayenge, a major critical and commercial success, for which he won his second Filmfare Best Actor Award. In 2007, the film entered its twelfth year in Mumbai theaters. By then the movie had grossed over 12 billion rupees, making it as one of India's biggest movie blockbusters. Earlier in the same year he found success in Rakesh Roshan's Karan Arjun which became the second biggest hit of the year.

1996 was a disappointing year for Khan as all his movies released that year failed to do well at the box office. This was, however, followed by a comeback in 1997. He saw success with Subhash Ghai's social drama Pardes — one of the biggest hits of the year — and Aziz Mirza's comedy Yes Boss, a moderately successful feature. His second project with Yash Chopra as a director, Dil to Pagal Hai became that year's second highest-grossing movie, and he won his third Filmfare Best Actor Award for his role as a stage director who falls in love with one of his new actresses. His performance won him his fourth Best Actor award at the Filmfare. He won critical praise for his performance in Mani Ratnam's Dil Se. The movie did not do well at the Indian box office, though it was a commercial success overseas. Khan's only release in 1999, Baadshah, was an average grosser.

2000s

in Sun Tech City, Singapore, in 2008]] Khan's success continued with Aditya Chopra's 2000 film, Mohabbatein, co-starring Amitabh Bachchan. It did well at the box office, and Khan's performance as a college teacher won him his second Critics Award for Best Performance. He also starred in Mansoor Khan's action film Josh. The film starred Khan as the leader of a Christian gang in Goa and Aishwarya Rai as his twin sister, and was also a box office success. In that same year, Khan set up his own production house, Dreamz Unlimited with Juhi Chawla (see below). Both Khan and Chawla starred in the first movie of their production house, Phir Bhi Dil Hai Hindustani.

In 2002, Khan received acclaim for playing the title role in Sanjay Leela Bhansali's award-winning period romance, Devdas. It was the third Hindi movie adaptation of Sharat Chandra Chattopadhyay's well-known novel of the same name, and surfaced as one of the biggest hits of that year. Khan also starred opposite Salman Khan and Madhuri Dixit in the family-drama Hum Tumhare Hain Sanam, which did well at the box office. That same year, he starred in the tearjerker, Kal Ho Naa Ho, written by Karan Johar and directed by Nikhil Advani. Khan's performance in this movie as a man with a fatal heart disease was appreciated. The movie proved to be one of the year's biggest hits in India and Bollywood's biggest hit in the overseas markets. The film relates the love story of Veer and Pakistani woman Zaara Haayat Khan, played by Preity Zinta. Khan's performance in the film won him awards at several award ceremonies. In that same year, he received critical acclaim for his performance in Ashutosh Gowariker's drama Swades. He was nominated for the Filmfare Best Actor Award for all three of his releases in 2004, winning it for Swades. His second release that year saw him playing the title role in the action film , a remake of the 1978 hit Don. The movie was a success. The film was a major critical success. In the same year Khan also starred in Farah Khan's 2007 film, Om Shanti Om. The film emerged as the year's highest grossing film in India and the overseas market, and became India's highest grossing production ever up to that point. While on one shoot in Los Angeles, along with his wife Gauri and director Karan Johar, he took a break from filming to attend the 66th Golden Globe Awards, held in Los Angeles, California, on 11 January 2009. Khan introduced Slumdog Millionaire along with a star from the film, Freida Pinto. He is currently filming for Anubhav Sinha's science fiction Ra.One opposite Kareena Kapoor, which is due for release on June 3, 2011.

Producer

in Germany]] Khan turned producer when he set up a production company called Dreamz Unlimited with Juhi Chawla and director Aziz Mirza in 1999. The first two of the films he produced and starred in: Phir Bhi Dil Hai Hindustani (2000) and Asoka (2001) were box office failures.

In 2004, Khan set up another production company, Red Chillies Entertainment, and produced and starred in Main Hoon Na, another hit. It was, however, India's official entry to the Academy Awards for consideration for Best Foreign Language Film, but it did not pass the final selection. Also in 2005, Khan co-produced the supernatural horror film Kaal with Karan Johar, and performed an item number for the film with Malaika Arora Khan. Kaal was moderately successful at the box office.

In 2008, Red Chillies Entertainment became the owner of the Kolkata Knight Riders in the BCCI-backed IPL cricket competition.

Television host

In 2007, Khan replaced Amitabh Bachchan as the host of the third series of the popular game show Kaun Banega Crorepati, the Indian version of Who Wants to Be a Millionaire?. The previous had hosted the show for five years from 2000–05. On 22 January 2007, Kaun Banega Crorepati aired with Khan as the new host and later ended on 19 April 2007.

On 25 April 2008, Khan began hosting the game show Kya Aap Paanchvi Pass Se Tez Hain?, the Indian version of Are You Smarter Than a 5th Grader?, whose last episode was telecasted on 27 July 2008, with Lalu Prasad Yadav as the special guest.

Awards and nominations

Khan has been awarded several honours which includes the Padma Shri, India's fourth highest civilian award from the Government of India in 2005. In April 2007, a life-size wax statue of Khan was installed at Madame Tussauds Wax Museum, London. Another statue was installed at the Musée Grévin in Paris, the same year. During the same year, he was accorded the Ordre des Arts et des Lettres (Order of the Arts and Literature) award by the French government for his “exceptional career”. There are also statues in Hong Kong and New York

In October 2008, Khan was conferred the Darjah Mulia Seri Melaka which carries the honorific Datuk (in similar fashion to "Sir" in British knighthood), by the Yang di-Pertua Negeri Tun Mohd Khalil Yaakob, the head of state of Malacca in Malaysia. Khan was honoured for "promoting tourism in Malacca" by filming One Two Ka Four there in 2001. Some were critical of this decision. He was also honoured with an honorary doctorate in arts and culture from Britain's University of Bedfordshire in 2009.

Filmography

Film actor

Producer

Phir Bhi Dil Hai Hindustani (2000)

Asoka (2001)

Chalte Chalte (2003)

Main Hoon Na (2004)

Kaal (2005)

Paheli (2005)

Om Shanti Om (2007)

Billu (2009)

Ra.One (2011)

Playback singer

Main to hoon Pagal - Baadshah (1999)

Apun Bola - Josh (2000)

Khaike Paan Banaraswala - Don - The Chase Begins Again (2006)

Ek Hockey Doongi Rakhke - Chak De India (2007)

Sattar Minute - Chak De India (2007)

Stunts director

Kuch Kuch Hota Hai (1998)

Main Hoon Na (2004)

Kabhi Alvida Naa Kehna (2006)

Chak De India (2007)

Om Shanti Om (2007)

Television appearances

Dil Dariya (1988)

Fauji (1988) ... Abhimanyu Rai

Doosra Keval (1989)

Circus (1989)

In Which Annie Gives It Those Ones (1989)

Idiot (1991) ... Pawan Raghujan

Kareena Kareena (2004) ... Special appearance

Rendezvous with Simi Garewal.....Guest

Koffee with Karan (2004–2007) ... Guest (3 episodes)

Kaun Banega Crorepati (2007) ... Host

Jjhoom India (2007) ... Guest

Nach Baliye (2008) .... Guest

Kya Aap Paanchvi Pass Se Tez Hain? (2008)  .... Host

Oye! It's Friday! (2009)  ... Guest

Tere Mere Beach Mein (2009)  ... Guest

Friday Night with Jonathan Ross (2010)  ... Guest

See also

List of Indian Actors

Newark Airport Incident

Notes

Bibliography

Nasreen Munni Kabir. The Inner and Outer World of Shah Rukh Khan (Documentary, 2005).

Shahrukh Khan - Still Reading Khan. A1Books Distributor 2007. ISBN 9788187107798.

Gahlot, Deepa; Agarwal, Amit. King Khan SRK. Augsburg Weltbild 2007. ISBN 9783828988699.

Ghosh, Biswadeep. Hall of fame: Shahrukh Khan (in English). Mumbai: Magna Books, 2004. ISBN 8178092379.

Chopra, Anupama. King of Bollywood : Shah Rukh Khan and the seductive world of Indian cinema (English). New York: Warner Books, 2007. ISBN 9780446578585.

External links

Category:1965 births Category:Filmfare Awards winners Category:Hindi film actors Category:Indian actors Category:Indian film actors Category:Indian film producers Category:Indian Muslims Category:Indian Premier League franchise owners Category:Indian singers Category:Indian television actors Category:Indian television presenters Category:Indian people of Afghan descent Category:Jamia Millia Islamia alumni Category:Living people Category:Officiers of the Ordre des Arts et des Lettres Category:Pashtun people Category:People from Delhi Category:People from Peshawar Category:Recipients of the Padma Shri Category:University of Delhi alumni