Directional
Experienced member
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why trade forex when you could trade currency futures?
Futures are generally 1 pip bid/ask spread, no carry charge or interest for maintaining margined positions, and real market depth available - and additionally you deal with regulated entities in a segregated account, unlike the majority of forex brokers.
Futures are generally 1 pip bid/ask spread, no carry charge or interest for maintaining margined positions, and real market depth available - and additionally you deal with regulated entities in a segregated account, unlike the majority of forex brokers.
Rhody Trader
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Arbitrageur said:
Two points about "carry charge":
1) It works both ways. If you are long the higher interest currency it's not a charge, but income.
2) There is carry in the futures market. It's in the spread between the contract price and the spot price, which narrows as the delivery date approaches. If you hold positions you better bet the carry influences your profitability, especially in currency pairs with a large interest rate spread.
fxmarkets
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Cash markets are infinitely easier to trade because there is no forward exposure. When you trade on the futures exchange, you are not only taking on spot exposure, but you are also exposed to fluctuations in the forward market. This is due to the fact that a futures price has two distinct components. A cash price, equivalent to the cash price quoted over the counter, and forward points that are either added to or subtracted from the spot price. The cash market is for a constant two days forward settlement.
The cash market turns over daily volume equivalent to 1.5 trillion dollars and growing. The currency futures market turns over a very small percentage of that amount and is shrinking. By trading in the cash market you are trading where more than 95% of the major currency players choose to execute their business. This translates into a much-reduced rate of slippage as the major players in the cash market can absorb much larger sizes than a local on the IMM floor.
The cash market is open 24 hours a day, starting Sunday at 16.00 ET and ending Friday afternoon at 1630 ET. The official futures session begins at 0820 ET and ends at 1500 ET. While the GLOBEX system now offers after hours trading, the liquidity is not good.
lifted the above, pro's, cons.
Fx.
The cash market turns over daily volume equivalent to 1.5 trillion dollars and growing. The currency futures market turns over a very small percentage of that amount and is shrinking. By trading in the cash market you are trading where more than 95% of the major currency players choose to execute their business. This translates into a much-reduced rate of slippage as the major players in the cash market can absorb much larger sizes than a local on the IMM floor.
The cash market is open 24 hours a day, starting Sunday at 16.00 ET and ending Friday afternoon at 1630 ET. The official futures session begins at 0820 ET and ends at 1500 ET. While the GLOBEX system now offers after hours trading, the liquidity is not good.
lifted the above, pro's, cons.
Fx.
