Noobish cme currency futures question!

Discussion in 'Trading' started by TGpop, Jan 30, 2010.

  1. TGpop


    At CME group i'm looking for the contracts for single currencies, as in, not 'pairs' so just euros, just pounds. When i check the futures it says for example GBP/USD but when i hang my mouse over it says this is the contract for the british pound, is it GBP/USD as my account will be held in dollars and at expiration i will buy pounds with USD?

    not used to currency futures but i think it's easier to analyse currencies as a whole as apposed to many different pairs.

    thanks i apologise for the noob-ness
  2. Every currency future is a pair!
    How can you value the USD unless it is compared to the other side of a pair?
    CME Fx futures are essencially the same vehicles as their spot cousins in Fx.

    I hope this makes sense!

    EC = Euro Futures EURUSD
    BP = Cable Futures GBPUSD
    JY = Yen Futures USDJPY **actually inverted!
  3. rickf


    Don't feel bad, it took me a while to figure fx out as well ... but the other poster is correct; they are always referenced in pairs. If the euro is down, you have to ask "against what?"

    Good to see you admit your newbieness and would suggest (not that you don't know already) to do a ton of homework and papertrading fx futures before you "go live." :)

    Good luck and good trading!
  4. The natural place to start your reading

    If you are long one contract and you let it expire you will get 62,500 GBP in your account at the exchange range you agreed with your counterparty. I have never done that though, I always roll to the next liquid contract when volume switches.
  5. TGpop


    o bugger :(. ive been demoing forex for months now but retail. After having a 2000 pip month back in november when i swing traded demo FX buying pullbacks in mega trends, i lost half of that in 3 days when the dubai annoucnement came out. So i decided to learn more economics so that i can better understand what's driving these trends, but i think it's really hard to try and analyse 2 economies for every pair ! so i thought having just indexes for each currency would be easier :(. Anyway ill still learn the fundamentals and develop my day trading style further, forex is actually quite hard to interpret on dailies in terms of economics, trends can shift at the flip of a dime. take USDCAD its in a downtrend since the oil export thing yet after dollar GDP strength im not sure whether its worth shorting anymore!

    to be honest, i think it's just best to 'get' and 'understand' economics, intermarket stuff, GDP , current account , NFP etc, and understand that they can make rather large moves happen, as opposed to trying to predict a new trend in a global-macro style.

    good thing is you can day trade forex on hourlies and it trends nicely.Still, i will learn fundamentals further, just to be more confient in trading decisions, like say USDCHF has broke out after that GDP announcement, had i not read the news then i would've been confused . plus EURUSD unwinding its short-dollar carry trade, and then this good USD news comes out only to push EUR further down.

    ugh, it's hard to know whether reversals are a change in fundamentals or a short term price move, nobody said this was easy !
  6. TGpop


    wait then, what is the difference between say spot forex and futures forex?
  7. One is Cash, and one are futures, deliverable on a predetermined date.

    You really need to read the CME tuturial on Fx futures, it is actually informative.

    The CME Globex is a regulated exchange where they actually honor thy stop, while Fx is the wild wild west and anything goes!

    Ever see times and sales in Fx????