How do forex futures trading prices relate to those in the cash forex market?
The most active currency futures trading contracts trade for four fixed dates in the year. They settle on the third Wednesday of March, June, September and December. In contrast to the futures market, the cash forex adjusts its maturity dates daily, trading primarily for monthly maturities of one, two, three, six and twelve months ahead, with the flexibility to quote for any individual date in-between. The interbank market thus trades for spot and forward delivery. The cash or interbank market is a delivery market. That means that all transactions between institutions must be settled for the full face value of each transaction. In contrast to the cash market, forex futures trading markets allow traders to buy and sell contracts and thus avoid the need for the cash settlement of trades. Such is always available at the quarterly settlement of maturing contract allowing professional arbitrageurs to keep the two markets tightly in line with one another. Currency Futures are spot prices adj
