What are 'E-Micro Forex Futures'

E-Micro Forex Futures are a type of currency futures contracts that are traded on CME Globex, a worldwide electronic trading system specializing in futures and their options.

E-Micro Forex Futures are unique in that they're one-tenth the size of standard forex futures.

BREAKING DOWN 'E-Micro Forex Futures'

E-Micro Forex Futures are a type of currency futures: exchange-traded contracts with currency exchange rates as the underlying commodity. There are both standard and e-micro contracts, each designed to suit a variety of traders' needs, accounts and risk tolerances.

E-micro Forex Futures contracts are offered exclusively by the CME Group and traded on CME Globex, an electronic futures trading platform. Unlike traditional forex, the currency futures market is regulated as a futures market and has centralized pricing and clearing.

There are several available E-micro Forex Futures contracts: euro/U.S. dollar; U.S. dollar/Japanese yen; British pound/U.S. dollar; U.S. dollar/Canadian dollar; Australian dollar/U.S. dollar US dollar/Swiss franc.

CME Group touts E-micro Forex Futures, a one-tenth the size of its usual forex futures, as "the perfect size" for forex investors who are interested in trading in a "regulated and secure forex market" but want to have a much more limited exposure to risk.

E-micro Forex Futures offer liquidity, security and transparency, according to CME Group.

"With more than $100 billion in daily liquidity, CME Forex is the largest regulated Forex marketplace in the world," it explains. The CME Forex product suite consists of 49 futures and 31 options contracts based on 20 currencies."

In addition, CME Group offers security via "centralized clearing, guaranteed counterparty credit and segregation of customer funds."

And its transparency and anonymity mean that forex traders, whether they are individuals or large institutions, have "complete and equal access to the book of prices and trading opportunities."

Benefits of E-micro Forex Futures

In 2009, Larry Schneider, director of business development the Chicago-based independent introducing brokerage firm Zaner Group, offered five reasons why the micro-currency trading enabled by E-micro Forex Futures would be good for some investors:

  • First, he noted the value of working within a regulated market.
  • Fully-transparent markets that offer investors a level playing field. 
  • Customer protection through segregated customer funds and counterparty credit risk.
  • All trades are executed on the CME Group's Globex electronic platform, which offers usability and dependability.
  • Micro currency futures are all cash-settled. Investors do not take on the risk or possibility of having to make or take physical delivery.
  1. Chicago Mercantile Exchange - CME

    The Chicago Mercantile Exchange is a futures exchange which trades ...
  2. Forex Training

    Forex training is a guide for retail forex traders, offering ...
  3. Forex - FX

    Forex is the market in which currencies are traded.
  4. Futures Contract

    An agreement to buy or sell the underlying commodity or asset ...
  5. Foreign Exchange Market

    The foreign exchange market is the forum in which traders can ...
  6. Real-Time Forex Trading

    Real-time forex trading relies on live trading charts to buy ...
Related Articles
  1. Trading

    Introduction To E-Micro Forex Futures

    At one-10th the size of regular FX contracts, the E-micros offer traders the opportunity to trade the forex in a regulated marketplace with reduced risks.
  2. Investing

    Currency Futures: An Introduction

    Find out why forex market is not the only way for investors and traders to participate in foreign exchange.
  3. Trading

    Forex Broker Guide

    A Guide To Choosing a Forex Broker
  4. Trading

    Forex market: Who trades currency and why

    The forex market has a lot of unique attributes that may come as a surprise for new traders. Learn more about who trades foreign currencies and why.
  5. Trading

    Forex trading: A beginner's guide

    Foreign exchange is the act of changing one country's currency into another country's currency for a variety of reasons, usually for tourism or commerce.
  6. Trading

    6 top-traded currencies and why they're so popular

    Every currency has specific features that affect its underlying value and price movements in the forex market. Learn why these currencies are especially popular for trading.
  7. Trading

    Futures Fundamentals

    This tutorial explains what futures contracts are, how they work and why investors use them.
  1. How do S&P 500 futures work?

    Learn about the mechanics of S&P 500 futures contracts, a type of stock index future introduced by the Chicago Mercantile ... Read Answer >>
  2. How can I calculate the notional value of a futures contract?

    Learn how the notional value of a futures contract is calculated, and how futures are different from stock since they have ... Read Answer >>
  3. What is the difference between trading currency futures and spot FX?

    The main difference between currency futures and spot FX is when the physical exchange of the currency pair takes place. Read Answer >>
  4. Forward Contracts vs. Futures Contracts

    While both forward and futures contracts allow people to buy or sell a specific asset at a specific time at a given price, ... Read Answer >>
  5. How do I set a strike price for a future?

    Find out why futures contracts don't have set strike prices like options or other derivatives, even though price change limits ... Read Answer >>
Trading Center