A currency future, also FX future or foreign exchange future, is a futures contract to exchange one currency for another at a specified date in the future at a price (exchange rate) that is fixed on the purchase date; see Foreign exchange derivative. Typically, one of the currencies is the US dollar. The price of a future is then in terms of US dollars per unit of other currency. This can be different from the standard way of quoting in the spot foreign exchange markets. The trade unit of each contract is then a certain amount of other currency, for instance €125,000. Most contracts have physical delivery, so for those held at the end of the last trading day, actual payments are made in each currency. However, most contracts are closed out before that. Investors can close out the contract at any time prior to the contract's delivery date.
Famous quotes containing the words currency and/or future:
“It is the international system of currency which determines the totality of life on this planet. That is the natural order of things today. That is the atomic, and sub-atomic, and galactic
structure of things today. And you have meddled with the primal forces of nature! And you will atone! Am I getting through to you, Mr. Beale?”
—Paddy Chayefsky (1923–1981)
“Where have those flowers and butterflies all gone
That science may have staked the future on?
He seems to say the reason why so much
Should come to nothing must be fairly faced.....”
—Robert Frost (1874–1963)