Forex Futures Trading and Spot Forex Trading

Forex futures are essentially about the establishment of a futures contract between two parties that obligates both parties to a trade of a currency pair at some point in the future. The price point is set beforehand, and the seller can own the currency once the actual future is written, or they may have a chance at risking the currency pair in hope that it will be cheaper at some point before what is called the settlement date.

Spot Forex is a pretty much the same thing as futures except that with spot fx the actual trade of the currency happens right at the point of trade or at a short time there after. The price point is determined at the point of trade as well and this is not much different than with Forex futures. The actual physical exchange of currency doesn't happen right away with futures as it does with spot, and the exchange instead happens on what is called the delivery date, which is typically a date set in the near future.

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