What is Futures Contract?

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A **Futures Contract** is a standardized, legally binding agreement traded on an organized exchange to buy or sell a specified quantity of an underlying asset, such as a currency, commodity, or financial instrument, at a predetermined price on a future date. These derivative instruments are primarily used in the FX and trading markets for price discovery, speculation, and risk management strategies like hedging and arbitrage.

Futures Contract

What is Futures Contract?

What are the key differences between Currency Futures and Forward Contracts in the FX market?

How are Futures Contracts effectively utilized for hedging currency risk in international trade?

What role does arbitrage play in maintaining price equilibrium between the Futures and Spot FX markets?

How does the margin and leverage system in Futures Contracts impact trading risk and capital requirements?

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