Currency Futures

Currency Futures Meaning:
In foreign exchange terminology, currency futures refer to standardized foreign exchange contracts traded on an exchange that involve the purchase of one currency and the sale of another. The delivery date for such transferrable contracts usually falls on particular date, often quarterly, in order to provide greater liquidity, and the futures trade in amounts that are multiples of the standard lot size for the contract.

Currency futures have been actively traded since 1972 on the International Monetary Market or IMM, a division of the Chicago Mercantile Exchange. These futures deliver on quarterly dates and have corresponding currency option contracts. They trade in all of the majors and minor currency pairs, as well as in some cross rates and exotic currency pairs against the U.S. Dollar. When a futures currency pair involves the U.S. Dollar, it will generally be quoted in U.S. cents per currency and will trade in fixed amounts of the counter-currency. This means the quotation convention is inverted from that used in the interbank market for currency pairs like USD/JPY, USD/CHF and USD/CAD.