Forex Futures and Market Hours

Forex Futures and Market Hours

 Forex futures are exchange-traded contracts to buy or sell a specified amount of a given currency at a predetermined price on a set date in the future. All Forex futures are written with a specific termination date, at which point delivery of the currency must occur unless an offsetting trade is made on the initial position.

In order to understand Forex futures, it is important to know about the hours  and days during which a Forex trader can place trades. The hours during which Forex markets are open varies according to the location of the Forex market but since participants are able to buy, sell, exchange and speculate on currencies in any market across the globe, the hours are almost insignificant. Because Forex markets operate in multiple time zones, it can be accessed at almost any time.

International currency markets are made up of banks, commercial companies, central banks, investment management firms, hedge funds, and retail forex brokers and investors around the world.

The international currency market is dominated by several market exchanges and involves an international network of exchanges and brokers around the world. Therefore, Forex trading hours are based on when trading is open in each participating country.

Here are the times when the markets are open for trading:

  • New York 8am to 5pm EST
  • Tokyo 7pm to 4am EST
  • Sydney 5pm to 2am EST
  • London 3am to 12 noon EST

During the times when markets overlap, the highest volume of trades takes place.

When it comes to Forex futures, the hours when the markets are open of great significance as a trader can set the predetermined price of his trade on a date in any of the markets.

Forex futures are mostly used by companies or sole proprietors to remove the exchange-rate risk inherent in cross-border transactions. In addition, they can be used by investors to speculate and profit from currency exchange-rate fluctuations.

 

 

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