A Future contract is evolved out of a forward contract and posses many of the same characteristics. In essence, they are like liquid forward contracts. Unlike forward contracts however, futures contracts trade on organized exchanges called futures markets. The contract has standardized amount and is subject to daily settlement procedure.
Currency Futures
A currency future is the price of a particular currency for settlement in a specified future date. A currency future contract is an agreement to buy or sell, on the future exchange, a standard quantity of foreign currency at a future date at the agreed price. The counterpart to futures contracts is the future exchange, which ensures that all contracts will be honored. This effectively eliminates the credit risk to a very large extent.
Currency futures are traded on futures exchanges and the most popular exchanges are the ones where the contracts are fungible or transferable freely. The Singapore International Monetary Exchange (SIMEX) and the International Monetary Market, Chicago (IMM) are the most popular futures exchanges. There are smaller futures exchanges in London, Sydney, Tokyo, Frankfurt, Paris, Brussels, Zurich, Milan, New York and Philadelphia.
Currency Futures
A currency future is the price of a particular currency for settlement in a specified future date. A currency future contract is an agreement to buy or sell, on the future exchange, a standard quantity of foreign currency at a future date at the agreed price. The counterpart to futures contracts is the future exchange, which ensures that all contracts will be honored. This effectively eliminates the credit risk to a very large extent.
Currency futures are traded on futures exchanges and the most popular exchanges are the ones where the contracts are fungible or transferable freely. The Singapore International Monetary Exchange (SIMEX) and the International Monetary Market, Chicago (IMM) are the most popular futures exchanges. There are smaller futures exchanges in London, Sydney, Tokyo, Frankfurt, Paris, Brussels, Zurich, Milan, New York and Philadelphia.