Forex Futures

AAA

DEFINITION of 'Forex Futures'

An exchange-traded contract to buy or sell a specified amount of a given currency at a predetermined price on a set date in the future. All forex futures are written with a specific termination date, at which point delivery of the currency must occur unless an offsetting trade is made on the initial position.

INVESTOPEDIA EXPLAINS 'Forex Futures'

Forex futures serve two primary purposes as financial instruments. First, they can be used by companies or sole proprietors to remove the exchange-rate risk inherent in cross-border transactions. Second, they can be used by investors to speculate and profit from currency exchange-rate fluctuations.

RELATED TERMS
  1. Exchange Rate

    The price of a nation’s currency in terms of another currency. ...
  2. Demo Account

    A trading account that allows an investor to review and test ...
  3. Sole Proprietorship

    The sole proprietor is an unincorporated business with one owner ...
  4. Foreign-Exchange Risk

    1. The risk of an investment's value changing due to changes ...
  5. Forex Option Trading

    A security that allows currency traders to realize gains without ...
  6. Currency Futures

    A transferable futures contract that specifies the price at which ...
Related Articles
  1. Combining Forex Spot And Futures Transactions
    Options & Futures

    Combining Forex Spot And Futures Transactions

  2. Introduction To E-Micro Forex Futures
    Forex Education

    Introduction To E-Micro Forex Futures

  3. Introduction To Currency Futures
    Mutual Funds & ETFs

    Introduction To Currency Futures

  4. Understanding The Spread in Retail Currency ...
    Forex Education

    Understanding The Spread in Retail Currency ...

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center