Trading the EUR/USD vs either the 6E or the E7 ?

Discussion in 'Forex' started by md2324, Oct 2, 2017.

  1. lovethetrade

    lovethetrade Guest

    There's no advantage to having volume when trading fx. I.e you wouldn't switch from spot fx to fx futures because you can access volume data.

    Spot fx is the way to go because of liquidity and potentially lower costs even though people associated with futures and the exchanges will want you to believe otherwise.

    With spot fx just assume constant volume.
     
    #11     Oct 3, 2017
    comagnum likes this.
  2. An important point which hasn't been covered by others is that for spot FX you don't earn the interest differential (carry) with a retail broker due to the markup on both borrowing and lending rates; but this is embedded in the futures price. So unless you're a lunatic who is day trading this stuff you'll be paying something like 1% a year of notional to hold your FX position (using IB spreads of +0.5% on a position of a million EUR and USD) relative to the futures. Trading forwards helps here, but the spreads are usually wider and not every broker offers them.

    GAT

    PS as far as costs go, the spread on the (full size) future is pretty similar to spot (about 0.5 tick) and the size is more than enough for most people; IB charge me twice as much in commission for a spot FX trade than for a single contract futures trade.
     
    #12     Oct 3, 2017
    trader42 and lovethetrade like this.
  3. LOw liquidity so easier for HFTs to fuck you up?
     
    #13     Oct 5, 2017