THE CME = THE CHICAGO MERCANTILE EXCHANGE.
IF you know anything about Futures which it is apparent you don't (no harm intended) You would know that the FUTURES exchange Began in CHICAGO, due to the change in crop prices of the midwest America, to put it as simply as possible.
For instance if you are a farmer and the weather forecast is showing a wipe out of your potential CORN or SOYBEANS or etc, sales, -- the FUTURES EX. allowed you to go on an exchange and HEDGE YOUR MONEY. For instance again. You know that the crop will be poor, thus, you short corn, so when you don't get paid from your crop, the market pays you on your short. AND YOU BREAK EVEN.
This MARKET was not originally designed for SPECULATION, it was for HEDGING, large and small cap spex came later,
Now, this can work in many different ways, you also could be as brash as to say "I know this will be a phenomenal season for my CORN crop, thus I will speculate more cash on the futures market and BUY or GO LONG CORN, then when you sell your crop and your contract you have doubled your money.
SPOT is like FUTURES, except the rules are different. When you buy spot even if you are looking ten minutes down the line you are looking into WHAT YOU THINK might happen in the FUTURE.
Simplest explanation.
ADD: When you take a futures contract that is EXACTLY what it is a contract, when you buy and sell "ON THE SPOT" hence the term "SPOT"
it is an instant transaction, not one that holds other extremities, such as delivery, default, etc. now getting too complicated.
The CME offers CURRENCY FUTURES as well.............
IF you know anything about Futures which it is apparent you don't (no harm intended) You would know that the FUTURES exchange Began in CHICAGO, due to the change in crop prices of the midwest America, to put it as simply as possible.
For instance if you are a farmer and the weather forecast is showing a wipe out of your potential CORN or SOYBEANS or etc, sales, -- the FUTURES EX. allowed you to go on an exchange and HEDGE YOUR MONEY. For instance again. You know that the crop will be poor, thus, you short corn, so when you don't get paid from your crop, the market pays you on your short. AND YOU BREAK EVEN.
This MARKET was not originally designed for SPECULATION, it was for HEDGING, large and small cap spex came later,
Now, this can work in many different ways, you also could be as brash as to say "I know this will be a phenomenal season for my CORN crop, thus I will speculate more cash on the futures market and BUY or GO LONG CORN, then when you sell your crop and your contract you have doubled your money.
SPOT is like FUTURES, except the rules are different. When you buy spot even if you are looking ten minutes down the line you are looking into WHAT YOU THINK might happen in the FUTURE.
Simplest explanation.
ADD: When you take a futures contract that is EXACTLY what it is a contract, when you buy and sell "ON THE SPOT" hence the term "SPOT"
it is an instant transaction, not one that holds other extremities, such as delivery, default, etc. now getting too complicated.
The CME offers CURRENCY FUTURES as well.............
DislikedMust be nice to have those kinds of friends. What is CME? How can a person use the spreads between spot and futures to bettre read Price Action? Thanks by the way for your responces. I enjoy learning as much as I can.Ignored
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