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AN INSIGHT
TO DAY TRADING

TOP 3 FOREX FUTURES



According to the Bank for International Settlements, the global currency market maintains an average daily volume of $6.6 trillion U.S. dollars making it the largest financial market in the world. Transactions in this market are not executed through a single exchange but a global network of banks and brokers from around the world. International currency markets help to facilitate foreign trade allowing companies selling their goods globally while receiving payments in their local currency to pay their expenses like payrolls in their local currency.


The currency market, also known as foreign exchange market or Forex, was created to facilitate the exchange of currency that is necessary as the result of foreign trade. Within this market, Forex futures have been a growing class of derivative securities and are traded with the CME Group in the United States.



EUR/USD

The euro was initially introduced as an accounting currency in 1999. On January 1st in 2002, the euro started circulating in member nations of the European Union. Over the course of several years, it became the base currency in the EU and, ultimately, replaced the to date existing currencies of its members. Consequently, the euro integrates and represents many European economies with a value more than €1 trillion circulation in the world, according to the European Central Bank. As of today, 19 of the 27 member countries of the European Union use the euro.


On the other side, the first United States dollar notes were, originally, created as demand notes to fund the Civil War of 1861. A standardized system for printing the notes was first developed in 1869. The U.S. dollar extended its power all through the next years and was laid out as a world reserve currency in the Bretton Woods Agreement of 1944 making it the most dominant currency in the world. Initially, the currency was exchanged as a coin valued by its weight in gold or silver. Afterward, it was exchanged as a paper note, which was backed by gold. During the 1970s, the gold standard was eliminated, and the worth of USD was allowed to float.


The EUR/USD pair has turned into the most widely-traded pair in the world since it represents a combination of two of the largest economies on the planet. It is impacted by factors that impact the worth of the euro and the U.S. dollar in relation to each other and to other currencies. The currency pair is traded as 6E futures contract via the Globex as part of the CME Group maintaining an average of 200,000 contracts per day.

EUR/USD FUTURES CONTRACT SPECS

Contract Unit

125,000 Euro

Price Quotation

U.S. dollars and cents per Euro increment

Trading Hours

Sunday - Friday 6:00 p.m. - 5:00 p.m. ET

Minimum Price Fluctuation

0.00005 per Euro increment = $6.25

Product Code

6E

Listed Contracts

Mar, Jun, Sep and Dec

Settlement Method

Deliverable

Last Trading Date

2 business day prior to the third Wednesday of the contract month.

Settlement Procedures

Exchange

GLOBEX



USD/JPY

The Japanese Yen was introduced in 1871. Initially, banks kept the option to print currency until the Bank of Japan has been established in 1882 with a monopoly on the control of the money supply. After World War II, the currency constantly appreciated. In order to balance the Japanese economy, the yen exchange rate was set at 360 yen per 1 USD as a part of the Bretton Woods Agreement. However, when the scheme was terminated in 1971, the value of the yen fell reaching 271 yen per USD in 1973. The subsequent years, the yen was affected by a period of deflation as well as the oil crises arriving at a low of 227 per USD with in 1980, eventually. In course of the following years, the Bank of Japan executed different stimulus and in combination with growing exports the value of the JPY further strengthened against the dollar reaching a value of around 120 yen per USD. Today, the currency is the world’s third most traded currency after the US Dollar and the Euro and considered a reserve currency.


The U.S. Dollar is considered the world’s number one reserve currency but has strongly depreciated against the yen the past years. Similar to the Bank of Japan, the central bank in the United States also made use of their available tools. However, instead of strengthening their currency the weakened it through an “easy” monetary policy. Since the U.S. dollar is a fiat currency, meaning that it is not backed by any tangible commodity, it can be created just by agreement. When more money is created, the law of supply and demand becomes valid, making existing money less valuable. Currently, there are 2.1 Trillion USD in circulation whereof 50% of that amount have been created on the past 10 years. Among other factors, that is a main reason why the USD has continuously lost value.


The JPY/USD pair has turned into one of the most traded currency pairs in the world. It is impacted by factors that impact the worth of the Japanese Yen and the U.S. dollar in relation to each other and to other currencies. The currency pair is traded as 6J futures contract via the Globex as part of the CME Group maintaining an average of 100,000 contracts per day.

EUR/JPY FUTURES CONTRACT SPECS

Contract Unit

12,500,000 Japanese yen

Price Quotation

U.S. dollars and cent per JPY increment

Trading Hours

Sunday - Friday 6:00 p.m. - 5:00 p.m. ET

Minimum Price Fluctuation

0.0000005 per JPY increment = $6.25

Product Code

6J

Listed Contracts

Mar, Jun, Sep and Dec

Settlement Method

Deliverable

Last Trading Date

2 business day prior to the third Wednesday of the contract month.

Settlement Procedures

Exchange

GLOBEX



GBP/USD (6B)

The first pound coin did not appear until 1489 and is, therewith, the oldest existing currency with origins that can be traced back to continental Europe. Decades later, British pound banknotes started, eventually, circulating in England under the rule of Henry VII., king of England not long after the foundation of the Bank of England in 1694. The pound functioned with a complicated system of shillings and pennies which was simplified with the decimal system was introduced in 1971. The British pound survived as an independent currency throughout the centuries while most of the other European countries adopted the euro as their single currency. That destiny seemed likely for the pound as well at the beginning of the 21st century, however, England remained loyal and did not give their currency. The Bank of England has been the authority issuing pound banknotes for more than 300 years surviving wars and economic crises.


The first United States dollar illustrates a comparably old currency as well, however, first notes were issued in 1861 as demand notes to fund the Civil War. A standardized system for printing the notes was first developed in 1869. The following years, the U.S. dollar extended its power and was made a world reserve currency in the Bretton Woods Agreement of 1944. Initially, the currency was exchanged by its weight in gold or silver but when the gold standard was eliminated in the 1970s the value of the USD was allowed to fluctuate.


The GBP/USD pair has turned into a popular currency pair making it one of the most traded pair by volume. The currency pair is traded as 6B futures contract via the Globex as part of the CME Group maintaining an average of 100,000 contracts per day.

GBP/USD FUTURES CONTRACT SPECS

Contract Unit

62,500 British pounds

Price Quotation

U.S. dollars and cents per GBP increment

Trading Hours

Sunday - Friday 6:00 p.m. - 5:00 p.m. ET

Minimum Price Fluctuation

0.0001 per GBP increments = $6.25

Product Code

6B

Listed Contracts

Mar, Jun, Sep and Dec

Settlement Method

Deliverable

Last Trading Date

2 business day prior to the third Wednesday of the contract month.

Settlement Procedures

Exchange

GLOBEX