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currency futures

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Financial Dictionary

Currency Futures

A transferable futures contract that specifies the price at which a specified currency can be bought or sold at a future date.

Investopedia Commentary

Currency future contracts allow investors to hedge against foreign exchange risk. Since these contracts are marked-to-market daily, investors can--by closing out their position--exit from their obligation to buy or sell the currency prior to the contract's delivery date.

Related Links

Getting Started in Foreign Exchange Futures
A Primer On The Forex Market
Futures Fundamentals

See also: Currency, Currency Forward, Futures Contract, Hedge, Mark-to-Market - MTM

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Financial Dictionary

currency futures

A contract for the future delivery of a specified amount of a major currency. Currency futures were developed in response to the substantial volatility of currency trading rates that occurred following the 1971 shift from fixed to flexible currency exchange rates.

Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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