Futures trading volume

Cost of currency futures contract

WHAT IS THE DIFFERENCE BETWEEN CURRENCY FUTURES AND FOREX TRADING?

Those looking to profit from fluctuations in currency valuations have two currency trading forums, spot foreign exchange trading and currency futures. In the case of spot foreign exchange trading, the underlying currencies are physically exchanged following the settlement date. In general, any spot market like forex trading involves the actual exchange of the underlying asset. For example, whenever a person goes to a bank to do a currency exchange, that person is participating in forex trading.

The main difference between spot foreign exchange trading and currency futures is when the currency trading price is determined and when the currency pair exchange takes place. The price of currency futures is determined when the currency futures contract is signed and the currency pair is exchanged on the future delivery date. The price of spot forex trading is also determined at the point of trade, but the currency pair exchange takes place immediately or shortly thereafter. It is important to note that currency traders in currency futures markets are speculators who usually close out their positions before the date of settlement, so most currency futures contracts do not remain open to the delivery date. Currency futures are often used as hedging instruments by foreign exchange traders. Currency futures have opened up the market to smaller currency futures traders to trade currencies effectively through gearing.

Contact a PSG currency trader to start trading currency futures.

HOW CAN I START CURRENCY TRADING?

They will arrange the opening of the account and ensure that all your trades are executed at the best available price.

WHAT ARE THE BENEFITS OF CURRENCY FUTURES TRADING?

Currency futures are standardised currency exchange contracts that are traded on the JSE's Currency Futures Exchange, through a centralised order book. This means that buy and sell prices are posted in real-time onto the central market by the relevant market makers, which allows for transparent pricing of the currency exchange.

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Business Compass LLC Forward & Future Contract
Mobile Application (Business Compass LLC)
  • Get quick price, value, and parity rates for forward or future contracts wherever you are
  • Specify actual dividend/yield received, as well as storage cost and commodity price percentage paid
  • Enter foreign interest rate in dividend field if required for your contract

Popular Q&A

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What is Rollover cost in futures trading ? Why is rollover cost negative in some contracts?

Is there any trading forecast value for rollover cost and percentage?

The rollover cost varies from broker to broker handling the transaction. The rollover cost can never be negative, but the value of the underlying commodity may be less than its initial cost.

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