What are Currency Futures?
Currency futures are exchange traded contracts to buy or sell a specific currency at a future date for at a pre-set price determined by the market. Unlike forex “spot” transactions which are short term contracts conducted through the inter-bank system, currency futures are longer term contracts executed primarily on the Chicago Mercantile Exchange (CME). Forex trading that occurs in live time, is referred to as the “Spot” market. Forex transactions on the spot market are usually settled within two days. The foreign exchange market, more commonly referred to as the “FX” or “Forex” market, is an inter-bank system in which investors and corporations can trade currencies. By volume, the forex market is the largest market in the world with over a trillion dollars being transacted daily on it. Currency futures, however, were first created in 1972 by CME traders who did not have access to the inter-bank system. The decision to create currency futures was a direct result of two historical deve