Currency forwards are much more flexible than currency futures and in many cases more appropriate for a business looking to hedge it’s currency exposure.

Advantages of currency futures contracts:

  • Low margin
  • High liquidity
  • Costs are very low
  • Potential to profit without taking delivery

Disadvantages of currency futures contracts:

  • Mainly paper based
  • Set amounts traded in lots
  • Losses can exceed your account balance
  • restricted to professional traders
  • Some brokers do not allow delivery

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