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Currency future
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{{Short description|Type of futures contract}} {{Foreign Exchange}} A '''currency future''', also known as an '''FX future''' or a '''foreign exchange future''', is a [[futures contract]] to exchange one [[currency]] for another at a specified date in the future at a price ([[exchange rate]]) that is fixed on the purchase date; see [[Foreign exchange derivative]].<ref>{{Cite web |title=Forex Futures Trading - What Are Forex Futures? |url=https://www.daytrading.com/forex/futures#what-are-forex-futures |access-date=2022-06-08 |website=www.daytrading.com}}</ref><ref>{{cite web |url=https://guides.library.utoronto.ca/c.php?g=251507&p=4937566 |title=MGFC30: Introduction to Derivative Markets - What are Foreign Exchange Futures? |publisher=[[University of Toronto]] |date=June 10, 2023 }}</ref> Typically, one of the currencies is the [[United States dollar|US dollar]]. The ''price'' of a future is then in terms of US dollars per unit of other currency. This can be different from the standard way of quoting in the spot [[foreign exchange market]]s. The ''trade unit'' of each contract is then a certain amount of other currency, for instance β¬125,000. Most contracts have physical delivery, so for those held at the end of the last trading day, actual payments are made in each currency. However, most contracts are closed out before that. Investors can close out the contract at any time prior to the contract's delivery date.
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