No. If EUR futures has 1 pips spread. http://www.elitetrader.com/vb/showthread.php?threadid=57309 See my first post. Plus, as I said, with FX shops, you can only take their bid/ask, but in futures marekt, you can place the bid/ask. That's the limit order. With FX, you always eat their bid/ask, that's the market order. So, for EUR or JPY, major currency pair, FX futures would be cheaper. Cross currency, depends. Anyway, FX futures is much transparent than FX spot trade.
Actually 1pips spread of EUR may be not precise because when the bid/ask matches which trade is occured, the spread is 0-zero. So your limit order is exeecuted, you just pay the commision, no slippage or spread.
Not quite, your computation underestimates true futures leverage. You neglected to multiply the 125,000 contract size in euros by the EUR/USD exchange rate. That's needed to get the contract size in USD, the same as the minimal exchange margins you quote. So, yes, the leverage employed always depends on the current rate. At, say, 1.20, it is: 125,000 x 1.20 / 2,835 = 53:1 (rather than 44:1). BTW, spot leverage works exactly the same way. For instance, if someone has a $10,000 account and buys or sells 2 lots of euro, their leverage is about 24:1 (200,000 x 1.20 / 10,000), not 20:1. If 2 lots of cable, then you're at 35:1, not 20:1. And so on. Forgetting to apply the rate seems to be a common (incorrect) mental shortcut.
Thanks for all the great replies!. I think they have pretty much cleared up my immediate questions. There are a few things though I am not clear about concerning the Bid/Ask spread. It seems from what has been explained that it is possible to beat the Bid/Ask price on occasion. For example, lets assume the quoted Bid/Ask for the Eur/Usd is 1.2100/1.2102 respectively. You can either take it at that price or enter in a new Bid/Ask at 1.2100/1.2101. You might get that price if someone is willing to eat a pip to get out of that position. Or, is it you initally take the spread when you open the position and then get it back when you close the position since you get to enter in you own Bid/Ask. Is either correct? If can manipulate you Bid/Ask like that, then I can see how it would be cheaper. Since I am a profitable trader, I am actually more interested in the tax advantages offered by Futures, but hey any way to save a pip or two.