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Future (OTC) Currencies



Future (OTC) Currencies traded at JMI Brokers are: Canadian $, Australian $, Euro, British pound, Japanese Yen and the Swiss Franc.

The principle of buying and selling for future delivery has characterized the markets for over a century and a half in physical commodities, mainly metals and staple foodstuffs. It has also been the feature of the foreign exchange markets, where prices can be agreed today for foreign currencies and other financial instruments that can be delivered in the future.

Futures Markets are markets in which participants can fix the price they will pay or receive for bonds, shares and currencies and other financial products, in the future (effectively the parties thus "lock into" a known exchange rate/price).

Trading is made by buying or selling futures contracts which are standardized according to the quality, quantity, delivery time and location for each instrument. A futures contract is specified with the month during which the delivery or settlement is to occur i.e. if the product is gold and delivery is in July then the price quoted is for July Gold.
There are three types of participants in futures markets, the one that wants physical delivery, the hedger who wishes to protect himself/herself against adverse movements in prices and the speculative investor.
The speculative investor has no intention of making or taking delivery of the commodity but, rather, seeks to profit from a change in the price. Investors buy a product when they anticipate rising prices i.e. entering long (and sell that product later, at the higher price), or sell a product when they anticipate declining prices i.e. entering short (and then buy that product later, at the lower price).

If you speculate in futures contracts and the price moves in the direction you anticipated, then you will be making profit. Conversely, if prices move in the opposite direction then losses are made. Speculators therefore are individuals and corporations who seek to profit from anticipated increases or decreases in futures prices.
For those individuals who fully understand and can afford the risks that are involved, the allocation of some portion of their capital to futures trading can provide a means of achieving greater diversification and a potentially higher overall rate of return on their investments.

Foreign exchange (FX) futures (OTC) are offering investors as well as risk managers opportunities to get benefits from market fluctuation .JMI customer's benefit from dealing anonymously in a fully transparent market, where large and small customers have equal access to the same prices and same liquidity with a very low margin requirement and superb trading conditions.
JMI Brokers offers 6 FX Futures (OTC) that covers major currency pairs and attracts both buys and sell investors including hedge funds, financial institutions and individual investors.

Benefits of trading FX Futures (OTC):

  • Market Spread (very tight spreads).
  • Low commissions fees.
  • Open, fair and anonymous currency trading.
  • Low margin requirements.
  • Very fast and liquid market.
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  • Main Currencies

  • Product Name

    Symbol

    Contract Size

    Spread

    Order

    Minimum Fluctuation

    Margin

    Months Traded

    Expiration Date

    Trading Hours (GMT)

    European Currency

    EC

    125,000 EUR

    Market Spread

    5 pips

    1 pip = $12.5

    1,000 USD

    Mar, Jun, Sep, Dec.

    Mar-16/03/07
    Jun-15/06/07
    Sep-14/09/07
    Dec-14/12/07

    Sun Open: 22:00 - 22:00 Reopen: 23:00 - 22:00 Fri Close: 22:00

    British Pound

    BP

    62,500 GBP

    Market Spread

    5 pips

    1 pip = $6.25

    1,000 USD

    Mar, Jun, Sep, Dec.

    Mar-16/03/07
    Jun-15/06/07
    Sep-14/09/07
    Dec-14/12/07

    Sun Open: 22:00 - 22:00 Reopen: 23:00 - 22:00 Fri Close: 22:00

    Swiss Franc

    SF

    125,000 CHF

    Market Spread

    5 pips

    1 pip = $12.5

    1,000 USD

    Mar, Jun, Sep, Dec.

    Mar-16/03/07
    Jun-15/06/07
    Sep-14/09/07
    Dec-14/12/07

    Sun Open: 22:00 - 22:00 Reopen: 23:00 - 22:00 Fri Close: 22:00

    Japanese Yen

    JY

    12,500,000 JPY

    Market Spread

    5 pips

    1 pip = $12.5

    1,000 USD

    Mar, Jun, Sep, Dec.

    Mar-16/03/07
    Jun-15/06/07
    Sep-14/09/07
    Dec-14/12/07

    Sun Open: 22:00 - 22:00 Reopen: 23:00 - 22:00 Fri Close: 22:00

    Australian Dollar

    AD

    100,000 AUD

    Market Spread

    5 pips

    1 pip = $10

    1,000 USD

    Mar, Jun, Sep, Dec.

    Mar-16/03/07
    Jun-15/06/07
    Sep-14/09/07
    Dec-14/12/07

    Sun Open: 22:00 - 22:00 Reopen: 23:00 - 22:00 Fri Close: 22:00

    Canadian Dollar

    CD

    100,000 CAD

    Market Spread

    5 pips

    1 pip = $10

    1,000 USD

    Mar, Jun, Sep, Dec.

    Mar-16/03/07
    Jun-15/06/07
    Sep-14/09/07
    Dec-14/12/07

    Sun Open: 22:00 - 22:00 Reopen: 23:00 - 22:00 Fri Close: 22:00

  • Trading Examples

  • A client believes that the EURO Future Contract is due to rise in the future against US dollar, to get benefit of the situation the client intends to buy EURO Future Contract.
    EURO is quoted at 1.3580 - 1.3581, the client buys 8 lots at 1.3581, the client requires minimum deposit of 1000 $ for each lot.

    EURO prices rise to 1.3625 - 1.3626, the client is satisfied with his profit and wants to close his positions, he therefore sells 8 lots of EURO Future at 1.3625, so the client has made profit of 44 points (1.3625 - 1.3581 = 0.0044) . To calculate the profit we will do the following:

    1. (Close price - open price) - (1.3625 - 1.3581 = 44 points)
    2. (points * pip value * number of lots) - (44 * 12.5 * 8 = 4400 US$)
    3. So the gross profit for the previous transaction is 4400 $.

    *Commission charges are NOT included in the above calculations.

    FUTURE (OTC) CURRENCIES


    Buying" to profit from the expected price increase ("Going Long")
    Future instruments are traded with the forwarded month's value. For example, assuming that now is January; tradable future contract for Euro is March (ECMAR). Over the coming month, the client expects the price to increase and decides to "buy", "x" number of lots of ECMAR (each lot representing 125,000 Euro) as he/she wishes and as the equity of his/her trading account allows. This "entry" trade is called "Going Long".

    If the price of Euro appreciates, the client can "close" the trade, with a profit, by "selling", "x" number of lots of ECMAR. The profit resulted from the particular "closed" trade is calculated by subtracting the "buying" price from the "selling" price and multiplying the difference by the contract size of the particular currency pair and the number of lots traded.

    Example 2 :
    "bought" 1 lot of ECMAR at 1.3350
    "sold" 1 lot of ECMAR at 1.3380

    Calculation:
    ("selling price" - "buying price") * contract size * number of lots = realized profit/loss
    (1.3380 - 1.3350) * 125,000 * 1 = + USD375.-

    "Selling" to profit from the expected price decrease ("Going Short")
    Future instruments are traded with the forwarded month's value. For example, assuming that now is January, tradable future contract for Euro is March (ECMAR). Over the coming month, the client expects the price to decrease and decides to "sell", "x" number of lots of ECMAR (each lot representing 125,000 Euro) as he/she wishes and as the equity of his/her trading account allows. This "entry" trade is called "Going Short".

    If the price of Euro depreciates, the client can "close" the trade, with a profit, by "buying", "x" number of lots of ECMAR. The profit resulted from the particular "closed" trade is calculated by subtracting the "buying" price from the "selling" price and multiplying the difference by the contract size of the particular currency pair and the number of lots traded

    Example 2:
    "sold" 3 lots of ECMAR at 1.3380
    "bought" 3 lots of ECMAR at 1.3350

    Calculation:
    ("selling price" - "buying price") * contract size * number of lots = realized profit/loss
    (1.3380 - 1.3350) * 125,000 * 3 = + USD 1,125.-

    Note: In the two examples above, in cases where the price of ECMAR moves in the opposite direction than expected, the realized profit shown above becomes a loss.

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