Foreign currency futures

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Also see: foreign currency

Foreign currency trading can be done on three main venues: the Interbank market, cash forex firms or exchange-traded futures and options. Although the term "FOREX" is widely used for cash trading in global currencies, exchanges steer away from using FOREX to describe their foreign currency futures and options business to avoid being categorized as part of the growing retail FOREX markets, which in some quarters have experienced regulatory and enforcement difficulties.

Foreign currency futures and options on futures can be used to hedge against exposure to adverse market moves.

Some of the advantages of trading forex futures are:[1]

References

  1. Using Currency Futures to Hedge Currency Risk. Chicago Mercantile Exchange.