Futures

"Futures" in the Forex market refer to standardized contracts to buy or sell a specific amount of a currency at a predetermined price on a set date in the future. Unlike forward contracts, which are customizable and traded over-the-counter (OTC), futures are traded on regulated exchanges and have standardized terms, including contract size, expiration dates, and settlement procedures.

Futures contracts are used by traders and investors to speculate on currency movements or to hedge against potential currency fluctuations. Because they are traded on exchanges, futures contracts offer greater transparency, liquidity, and counterparty risk management compared to forward contracts.

Trading futures involves a high level of leverage, which can magnify both potential gains and losses. It's essential for traders to understand the mechanics of futures trading, including margin requirements and the potential for margin calls if the market moves against their positions.