The biggest increase in trading activity in the
last decade has been on the Forex markets and whilst retail
investors tend to trade spot FX, there are a number of traders who
are turning to currency futures as a market of choice.
Spot FX trading vs FX Futures
Currency futures don't offer the leverage afforded by the over
the counter (OTC) FX providers but they do allow traders to
hedge spot positions or to take longer term views on a currency
pair. Spot FX trading is generally more suited to short term
trading whereas FX futures are traded on a quarterly basis allowing
traders to take a medium and longer term view.
Major currency pairs
The vast majority of private investor spot currency trading is
conducted across the major currency pairs and this is also true for
currency futures with the euro, £ and dollar crosses being most
actively traded on the CME exchange. Currency future contracts
are cash settled, the buyer or seller receives or delivers an
agreed amount of currency to the other party (this is known as the
contract size) at the end of the contract period.
As with other futures markets it is therefore very important to
know when your contract is expiring and to square your trading
position if you do not want to receive or deliver the underlying
The CME is keen to try and compete with the many 'off exchange'
Forex Brokers currently operating in the market and so has recently
introduced mini and micro contracts to encourage the smaller
investor to consider using currency futures rather than the spot
foreign exchange providers.
Euro vs USD, GBP vs USD, USD vs JPY, USD vs CHF, USD vs AUD,
EURO vs GBP
All currency futures are traded on the CME exchange and are
offered on a quarterly basis for March, June, September and
December. All contracts are cash settled and have the same
last day of dealing which is the second business day immediately
preceding the third Wednesday of the contract month (usually
||Standard Lot Size
||Mini Lot Size
||Micro Lot Size
Further resources on Futures trading
Comparing Futures brokers
Below is a table of Futures brokers with a few key
account-opening criteria that we believe should be considered when
you are deciding which broker to open an account with. It's not
always about price; finding a broker that suits your style of
trading and your technical requirements is as, if not more,
important than shaving a few pence off of your dealing costs.
Start comparingFutures brokers