Quoting diallistDislikedThank you Vegas. That makes sense.
To avoid another post, please allow another question.
I took the futures entry price on the JPY and took the reciprocal to get the spot price. But it was different from the spot price on my chart by a large amount (between 10 & 20 pips as I recall).
Is there a special calculation required to convert between future and spot prices?
Thanks Vegas, you're a good man!
DialIgnored
This is one of the main reasons I trade futures and not spot. The difference you speak of is the interest rollover between today and the expiration of the March contract on March 13, 2006.
If today the difference is 20 pips, 2 days from now it will be 19, and 2 days from then 18, all the way to the expiration date when they will be exactly the same. This difference is always priced into the futures contract.
This allows for exchange trades because, now you don't have to worry about the rollover and the credit or debit of interest. In addition, this is the TRUE interest rollover, not 5% added or subtracted by the house so they can stick it to your spot position.
Since there is only the price you buy and sell [at $12.50 per pip], it makes for seamless trading
vegas