Content of forex futures contracts
2023-07-24
Summary:
Delve into forex futures contracts, valuable instruments for speculation. Gain insight into their intricacies to navigate trading effectively.
Forex futures contracts involve factors such as currency pairs, contract size, delivery date, delivery method, trading time, price fluctuation restrictions, and exchange rules for trading. For example, a contract may specify that the currency pair for the transaction is EUR/USD, the contract size is 100000 units of currency, the delivery date is a specific future date, the delivery method is cash settlement, and the transaction time covers multiple time zones around the world. In addition, contracts may have price fluctuation restrictions, and traders must comply with exchange rules and regulations, including position restrictions and margin requirements. Traders should understand and comply with contract regulations before trading in order to make wise decisions.
What are the contents of forex futures contracts?
1. Trading unit
The trading unit of forex futures refers to the "specific quantity" of the trading currency represented by each contract. This specific quantity is determined by the exchange based on a normal exchange rate between various underlying currencies and settlement currencies. For example, among the various foreign exchange futures traded on the "International Monetary Market" of the Chicago Mercantile Exchange, the exchange rate of the pound against the US dollar is generally the highest, while the exchange rate of the yen against the US dollar is generally the lowest. Therefore, the trading unit of the GBP futures contract is the lowest, and the exchange's prescribed trading unit is only GBP 62500. The highest trading unit for yen futures contracts is set at 12500000 yen (200 times the trading unit for pound futures contracts).
2. Delivery Month
The delivery months for all futures contracts in the international monetary market are the same, which are March, June, September, and December each year. The third Wednesday of the delivery month is the delivery date for that month.
3. General code
In practical operations, exchanges, futures commission merchants, and futures market tables all use codes to represent foreign exchange futures. The common codes of forexre futures forex eight major currencies are British pound BP, Canadian dollar CD, Dutch guilder DG, Deutsche Mark DM, Japanese yen JY, Mexican peso MP, Swiss franc SF, and French franc FR, respectively.
4. Minimum price fluctuation range
The international monetary market has set the minimum fluctuation range for each foreign exchange futures quotation. On the trading floor, the bid made by the broker can only be a multiple of the minimum volatility.
The minimum volatility levels for the eight main foreign exchange futures contracts are as follows: GBP 0.0005, CAD 0.0001, Dutch guilder 0.0001, Deutsche Mark 0.0001, Japanese yen 0.0000001, Mexican peso 0.00001, Swiss franc 0.0001, French franc 0.00005.
5. Daily limit for price fluctuations
The daily limit is the maximum fluctuation range of a futures contract within a day that is higher or lower than the settlement price of the previous trading day.
The price limits of eight kinds of foreign exchange futures contracts are as follows: Mark 1250 US dollars; Japanese yen 1250 US dollars; Swiss franc 1875 US dollars; Mexican peso 1500 US dollars; Dutch guilder 1250 US dollars; French franc 1250 US dollars. Once the quotation exceeds the limit, the transaction is invalid.
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