CURRENCY FUTURES CURRENCY FUTURES MARKETMARKET

DEFINITIONDEFINITION

►Standard volumeStandard volume

►Particular currencyParticular currency

►Settlement dateSettlement date

HISTORYHISTORY

► IN 1919 CME was established to meet IN 1919 CME was established to meet the needs of :the needs of :

► Farmers and users of agricultural goods.Farmers and users of agricultural goods.

► IN 1972 CME established IMM division IN 1972 CME established IMM division which allowed for futures in :which allowed for futures in :

► securitiessecurities► goldgold► foreign currencies.foreign currencies.

DIFFERENCIATION DIFFERENCIATION B/WB/W Futures Contracts & Forward Futures Contracts & Forward

ContractContract ► 11► 22► 33► 44► 55► 66► 77

► 11► 22► 33► 44► 55► 66► 77

Corporation choose Futures OR Corporation choose Futures OR Forward Contract ?Forward Contract ?

►EXAMPLEEXAMPLE