Series 3: 3.1.2. Foreign Exchange Futures

Taken from our Series 3

3.1.2. Foreign Exchange Futures

Like other futures contracts, foreign exchange futures have a standardized unit size. The contract size and other contract specifications for the three most frequently traded currencies are as follows:

Frequently Traded Currencies

Contract Specs

Euro

British Pound

Japanese Yen

Contract size

€125,000

£62,500

¥12,500,000

Minimum tick

$0.00005/€

$0.0001/£

$0.0000005/¥

Tick value

$6.25

$6.25

$6.25

Number of ticks per basis point ($0.0001)

2

1

200

BP value ($0.0001)

$12.50

$6.25

$1,250.00

Contract months

20 months in March, June, September, December quarterly cycle

Unlike the cash market, all foreign exchange futures contracts are quoted in American terms, where the foreign currency is the base currency and the U.S. dollar is always the terms currency.

Currency futures are delivered in the months of March, June, September, and December on the third Wednesday of the delivery month. Contracts extend to 20 months. The currencies must be physically delivered at designated foreign financial institutions. The margin requirement for a currency futures contract reflects one day’s anticipated price movement. Like other futures contracts, positions are marked to market daily, and profits or losses are posted to the tra

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