What are the trading rules of foreign exchange futures market?
Any place has its own rules, and the foreign exchange futures market is the same. What are the trading rules of the foreign exchange futures market? Quickly follow the pace of small make-up to understand and understand it~
1. The transaction must be completed through a clearing company
Each foreign exchange futures contract must be signed with the clearing company or guarantee company of the foreign exchange futures exchange. That is to say, the clearing company acts as the intermediary between the two sides of the foreign exchange futures transaction, and the buyer and the seller do not have to meet directly. The clearing company ensures the smooth progress of the foreign exchange futures transaction, thus eliminating the various credit investigation conducted by both parties due to distrust.
2. Transaction price and margin
When a foreign exchange futures transaction is concluded, both the buyer and the seller must determine the exchange rate of the transaction, and pay a certain amount of deposit to the member of the clearing house (company) according to a certain proportion, and the member shall transfer the deposit to the clearing house in accordance with the provisions.
Margin is divided into two categories. One is the original margin, which refers to the margin paid at the beginning of the transaction. The amount of margin varies with the currency of the transaction. Generally, the margin of each foreign exchange futures contract is 900-2800 US dollars. The other is maintenance margin, which refers to the margin paid by traders when the initial margin is insufficient. The role of supplementary trading is to enable traders to continue trading, so it is called maintenance margin.
3. Liquidation of open positions
In foreign exchange futures trading, all open positions of contracts must be settled day by day according to the market closing price of the day, and the current price of foreign exchange futures contracts should be determined according to the market price. That is, the profits and losses are calculated according to the daily mark to market system, and then the amount of maintenance margin is adjusted.
4. Maximum exchange rate volatility
The foreign exchange futures exchange has set limits on the fluctuation range of exchange rate on each trading day, so as to avoid excessive risks. However, please note that the daily fluctuation of exchange rate is only valid for a short period of time after the opening of the market, and there will be no price limit until the market is closed on the same day. Therefore, this is quite different from the general futures trading volatility limit. The exchange rate risk is really "law has no fixed law" and is unpredictable. It is better for traders to be cautious.
5. Lowest unit of price fluctuation
In order to facilitate the unified calculation of trading, all exchanges have stipulated the minimum fluctuation unit of exchange rate. For example, the minimum fluctuation of pound sterling is 0.002 and that of French franc is 0.0005 franc.
6. Unit of quantity of transactions
The futures contracts of foreign exchange futures trading are standardized contracts, and the trading units of each contract are fixed. The exchange has provisions on trading units for different foreign exchange currencies, that is, the amount of foreign currency contained in a foreign exchange futures contract. Usually, the amount of a foreign currency is equivalent to the amount of US $5000 that can be converted at the current exchange rate. The transaction is carried out according to this unit of quantity or its integral multiple. For example, a contract for Swiss francs is 125000 Swiss francs, so the transaction of 1250025000 Swiss francs can be carried out.
In foreign exchange futures trading, each unit of foreign currency (100 units of Japanese yen) is quoted in US dollars, which is the American quotation method. For example, 1 = $1.7100, DM1 = $0.6310, SF1 = $0.4520, etc., and the quotation only quoted unit price, without the difference between the buying price and the selling price.
8. Delivery month of foreign exchange futures
Each foreign exchange futures market has a specific delivery month. For example, IMM stipulates that the delivery months of sterling are January, March, April, July, September, October and November, and the delivery date is the third Wednesday of the delivery month.
The above is about the introduction of foreign exchange futures market trading rules, I believe you have a certain understanding.
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