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How important the hedgers speculators and arbitrageurs in currency futures market?
Wiki User
∙ 10y ago
Headgers are basically people who tend to mitigate the risk arising out of a trade or any underlying securities basically includes exporters & importers.
Speculators on the otherhand bet on the price movements takes calculated risk when the market moves up on their expectations.
Arbitrageurs takes risk by investing in alternative markets. Gain realised from the same is unlimited.
All of the above are highly important as far as currency future market is concerned.
Wiki User
∙ 10y ago
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When did trading begin in foreign currency futures?
In 1972 it launched a contract in foreign currency futures.
What is an example of some instruments that can be traded on the futures market?
Futures contracts involve U.S. Treasury bonds, agricultural commodities, stock indices, interest-earning assets, and foreign currency.
What is the difference between foreign exchange and currency futures?
Foreign Exchange (Forex) is everything that has to do with converting one currency to the other. You often see foreign exchange market, foreign exchange transaction, foreign exchange rate. Foreign exchange rate is simply a rate at which you can convert one currency to the other, a price of one currency expressed in the other currency. For example if you see EUR/USD 1.30, this means you can buy one Euro for 1.30 US Dollars. 1.30 is the eur/usd forex rate. Futures are financial contracts that set the price for delivery in the future. There are futures on almost all asset classes, including currency. An example of currency future would be a contract to sell 1 Million EUR against USD for a price (rate) of 1.30 USD per EUR in 3 months.
How do Currency Futures relate to Spot Rates and Forward Exchange Rates?
Persons interested in currency trading will want to know how to get started; find trading data; open an account;fill a trading order; view the results of a trade gain or loss.
Will the Dow Jones rise tomorrow?
Watch the futures Watch the futures
When did trading begin in foreign currency futures?
In 1972 it launched a contract in foreign currency futures.
How is zero sum maintained in futures trading when speculators outnumber hedgers?
Zero sum is maintained by the fact that there is always two parties in a futures transaction; the Long and the Short. One wins at the expense of the other. It does matter how many speculators or hedgers there are because each individual futures contract is entered into by two parties.
What is differences between currency future and currency future contracts?
"Futures" and "Futures contracts" are the same thing.
How do speculators know what positions to take in futures markets in order to profit from superior forecasts of future spot prices?
ive never wiil no it
How can currency futures be used by corporation?
The currency futures can be used by a corporation to exchange one currency for another at a specified date in the future at a price that is fixed on the purchase date. It is also called foreign exchange future or FX future.
Who profits from futures trading?
The main people that profit from futures trading are the hedgers and speculators. The hedgers are the producer of the commodity who trades a futures contract to protect himself from changes in prices in the future for his product. A speculator is the independent floor traders and private investors that buy the contract and sell it for higher price.
Does forex futures have anything to do with currency?
Yes. Forex Futures are when you buy a certain amount of stock in something knowing you are just going to trade it in later on. You can find out more on Investopedia.
What is an example of some instruments that can be traded on the futures market?
Futures contracts involve U.S. Treasury bonds, agricultural commodities, stock indices, interest-earning assets, and foreign currency.
Profiting With Gas And Oil Futures?
New information constantly flows into the futures markets for oil and natural gas. The nature of the information influences the relative prices of a barrel of oil or one million BTUs (MMBtu) of natural gas. Sometimes changes in these prices can be both sudden and severe. When news of the OPEC oil embargo in 1973 hit the oil futures market, the price of a barrel of oil rocketed upward to over $40 for the first time. Later in 1979 and 1980 the price of a barrel of oil went over $70. Speculators seeking to make a profit in the oil and natural gas futures markets need a strong stomach and a hard head. This is not an occupation for the weak-willed. A oil and gas futures trader needs to be aware of a multiplicity of factors, including how much he is leveraged compared to other traders. Futures traders borrow money from futures exchanges to magnify the effects of even small moves in oil and gas prices. Using leverage to take advantage of volatility is often the only way a trader can make enough profits to cover his costs. Turning a profit in the rough and violent oil and natural gas futures markets is not just about making money. The speculator plays a vital role by purchasing and selling oil and gas futures contracts. The oil companies sell barrels of raw crude oil to oil speculators at a predetermined price. The speculator is paid to assume the risk that the price of oil will be lower or higher than the price the oil was sold for. The speculator then resells the oil to a refinery company. Again, the price the oil company is paid does not change, but the price of the oil while it is held by the speculator changes considerably. Trading oil and gas futures contracts is all about managing risk. Speculators are paid to assume risks on behalf of others. Most speculators probably have never seen a barrel of oil in their lives. Consumers, executives and workers all benefit from the oil and gas futures markets.
What has the author Keith C Brown written?
Keith C. Brown has written: 'Hobbes' 'Interest rate and currency swaps' -- subject(s): Currency swaps, Interest rate futures
What has the author Russell R Wasendorf written?
Russell R. Wasendorf has written: 'All About Futures' -- subject(s): OverDrive, Business, Finance, Nonfiction 'Foreign currency trading' -- subject(s): Foreign exchange futures
How do you calculate the currency futures?
By Exchange : Forward rate = Spot price * (1/ int rate * Tenor(Time:90/360))
