The profit of foreign exchange relative to currency futures trading is considerable. The difference between the two tools comes from the reality of seeking truth [such as each history, its objective observers and their importance in the modern foreign exchange market] to more specific issues [such as transaction costs, margin necessity, access to Liquidity, the difficulty of trading]. The use of services and the technical and educational support available to the source of each service. These differences are as follows:
More trading volume = improved liquidity. Today, CME Group's daily currency futures trading volume has exceeded 2% of daily trading volume. from
Foreign exchange market from
. Unparalleled liquidity is one of the many advantages of the foreign exchange market to seize more currency futures. The truth tells us that this is an old news. Any currency professional can tell you that cash has been king since the dawn of the modern money market in the early 1970s. The actual message is that individual traders in each foreign exchange risk profile now have full rights to use the opportunities offered by the foreign exchange market.
Compared with the currency futures market, the foreign exchange market is more strict in raising bids. By reversing the futures cost to evaluate it as cash, you can be happy to see that in the USD / CHF example, reverse the futures selling price of .5894-.5897 to get the currency price of 1.6958-1.6966, relative to foreign exchange. The market can add 5 points.
Compared with currency futures trading, the foreign exchange market has higher advantages and lower margin fees. When trading currency futures, the buyer charges a margin fee for “daytime” buying and selling, and another margin fee for “overnight”. These foreign exchange margin rates may vary depending on the size of the business. When trading in the cash market, you must accept the same margin rate day and night. Of course, the margin trading will increase your foreign exchange profits and losses on average.
The Forex market utilizes terms and cost quotes that are easy to understand and used worldwide. Currency futures quotes are a reversal of cash value. For example, if the USD/CHF cash price is 1.7100 / 1.7105, the futures price is .5894 / .5897; a method that is only followed within the futures trading range.
The currency futures expense increases the difficulty of the foreign exchange prepayment portion, which takes into account the time factor, the interest rate and the interest rate difference caused by different currencies. The foreign exchange market does not need to make such changes, perform mathematical operations or consider futures contract interest rate factors.
Forex trading via FOREX.com is free*. Currency futures have additional trading commissions, transaction fees and agency fees.