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General TradingC
Currency Futures
Currency futures are standardized exchange-traded contracts that obligate the buyer to purchase, or the seller to sell, a specific currency at a predetermined price and date in the future. They are traded on regulated exchanges like the Chicago Mercantile Exchange (CME) and are used for both hedging and speculative purposes. Unlike OTC forwards, futures contracts have standardized sizes, expiration dates, and are subject to daily mark-to-market settlement through a clearinghouse.
Example
“A trader on the CME buys a euro futures contract at 1.1000, obligating them to purchase 125,000 euros at that rate on the contract's expiration date. If the euro rises to 1.1200, the trader profits from the difference.”