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FX Futures via CME

  • #1
  • First Post: Mar 26, 2012 8:52pm Mar 26, 2012 8:52pm
This is trading currencies as futures, basically what spot or "cash" traders do that are speculators. The difference is slim, you want to buy or sell at a current price to "speculate" a gain in the FUTURE. Hence the term futures.

So, Who trades with CME and FX FUTURES?

Anyone here?

Also if everyone HATES their broker, cash up and move your funds to a regulated exchange. I would BET my bottom dollar we still get the same amount of complaints.

Anyone?

X
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
  • #2
  • Mar 26, 2012 9:31pm Mar 26, 2012 9:31pm
Quoting XTrade
This is trading currencies as futures, basically what spot or "cash" traders do that are speculators. The difference is slim, you want to buy or sell at a current price to "speculate" a gain in the FUTURE. Hence the term futures.

So, Who trades with CME and FX FUTURES?

Anyone here?

Also if everyone HATES their broker, cash up and move your funds to a regulated exchange. I would BET my bottom dollar we still get the same amount of complaints.

Anyone?

X
I trade 6E from time to time but my main focus is crude oil ... and I also trade spot FX.
  • #3
  • Mar 26, 2012 10:37pm Mar 26, 2012 10:37pm
Quoting XTrade
This is trading currencies as futures, basically what spot or "cash" traders do that are speculators. The difference is slim, you want to buy or sell at a current price to "speculate" a gain in the FUTURE. Hence the term futures.

So, Who trades with CME and FX FUTURES?

Anyone here?

Also if everyone HATES their broker, cash up and move your funds to a regulated exchange. I would BET my bottom dollar we still get the same amount of complaints.

Anyone?

X
I may be wrong but you can trade CME FX Futures only via several brokers. For example, MF Global. I think it is clear now that you would have been stuck in its bankruptcy process and lost a lot of money. See, no difference between safety of funds between OTC Forex brokers and CME-authorized futures brokers.

Take care.
  • #4
  • Mar 27, 2012 7:51am Mar 27, 2012 7:51am
(i trade 6E on CME and CL on NYMEX, using Vision as my FCM.)

First off, I enjoy 6E being traded still via the good old 4 decimal pricing, this 5 decimal thingy is enough to drive anyone mad (I mean, ie: previous high was 1.33553 so where should I trade? 1.33554? 552? 55 even? You know what I am saying?)

Secondly, Stop trades only get triggered if that price has actually gotten traded, nothing of this OTC touching/trading-through Bid/Ask business.

Liquidity is good on 6E (EURUSD), on average well above 200k contracts get traded per session. I trade the front month contract (on 6E there are only 4 expiry dates p.a), as said, liquidity is good and spreads are tight.
  • #5
  • Mar 27, 2012 8:00am Mar 27, 2012 8:00am
I trade Euro futures on CME. It is on their Globex platform.

Just keep in mind that the value of this contract is 125 000 Euros, so it is a pretty big contract. The contract symbol at most of the br0kers is 6E. Initial margin for this contract at my br0ker is $5400 so it is suitable for only professional traders who have enough capital.

Also have a look at the options market for 6E, it is very liquid.
  • #6
  • Mar 27, 2012 9:45am Mar 27, 2012 9:45am
I'm not sure and would need correction from one of the gents that trades with them.

I believe this is INcorrect and you can trade VIA CME GLOBEX. U just gotsta have the $$$ Greenbacks, FRNs, Dollaz!

Not sure if there needs to be an intermediary due to the fact that CME is the clearinghouse for the trades and the exchange itself.

http://www.cmegroup.com/trading/file...gfxfutures.pdf

Not sure if there;s anything in there.

The answer is in here somewhere.
http://www.cmegroup.com/trading/fx/

Also, I will note to the original post that everyone that has posted seems to possess a certain level of experience and professionalism, thus, they do not seem to be complaining CME stole their money.

Also, I don't understand How if you are trading Real ON exchange Futures, your contracts would get liquidated at a loss if some shoddy IB goes bankrupt.

I would think CME would be liable as you are holding the position and they are the exchange. Again NEED CONFIRMATION.



Quoting slovforex
I may be wrong but you can trade CME FX Futures only via several brokers. For example, MF Global. I think it is clear now that you would have been stuck in its bankruptcy process and lost a lot of money. See, no difference between safety of funds between OTC Forex brokers and CME-authorized futures brokers.

Take care.
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
  • #7
  • Mar 27, 2012 10:48am Mar 27, 2012 10:48am
Exchanges, like CME, CBOT, NYMEX (CME Group) operate their own clearing house, with taking over counterparty risk of it's FCM's/Clearing Firms, but also offer a Clearing facility for OTC products via their ClearPort.

CLS (Continuous Linked Settlement) take over Settlement Risk on the FX market.

At any given time a clearing firm or bank being a member of CLS must have the means to be able to settle the counterparty transaction. For instance on spot-FX they would need to settle the trades with Valuta T + 2.

In answer to your question with regards to Clearing Firms who used the so called 'segregated client funds' to be used for their own prop book, which is of course illegal; quite right, in MFG's case in particular the Exchange will most probably have to step up at one point or another, though, this case in particular is extremely complex indeed - it might take years until clients will receive back all, or only parts of their funds (as of writing this post there is still £1,767,927,267.34 unsettled.)

PS: may I also point you to this post.

Kind regards.
  • #8
  • Mar 27, 2012 11:20am Mar 27, 2012 11:20am
Quoting XTrade
I'm not sure and would need correction from one of the gents that trades with them.

I believe this is INcorrect and you can trade VIA CME GLOBEX. U just gotsta have the $$$ Greenbacks, FRNs, Dollaz!
In reality, no. You need to go through a broker to trade on the CME. You can lease an exchange-seat for a fee (become a non-clearing member), and save alot on fees, but that only makes sense for traders who trade really big, and you still have to go trough a broker.

It is theoretically possible to become a self-clearing member of CME so that you can trade directly there, without broker-intermediary. For an individual private trader, its not really possible, nor would it make any sense to do so.
  • #9
  • Mar 27, 2012 8:45pm Mar 27, 2012 8:45pm
If you have a seat, why do you need a broker? To have a seat you should have more than enough capital to
A. either trade the FIRM/customers money
B. Be a trader working for the Firm and trade your own account.
C. If you are that big, and have your own seat, you would likely be able to afford runners and what not, thus you are the market maker in a sense, One could have their own seat I suppose and do exactly that.
D. Is there even a PIT for this exchange? I don't think there is.
I believe it is all electronic
E. Then rendering the need for a seat useless.
F. You just need money.

Correct what's wrong.


XT

Quoting shrike
In reality, no. You need to go through a broker to trade on the CME. You can lease an exchange-seat for a fee (become a non-clearing member), and save alot on fees, but that only makes sense for traders who trade really big, and you still have to go trough a broker.

It is theoretically possible to become a self-clearing member of CME so that you can trade directly there, without broker-intermediary. For an individual private trader, its not really possible, nor would it make any sense to do so.
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
  • #10
  • Mar 27, 2012 9:29pm Mar 27, 2012 9:29pm
A "seat lease" or "membership lease" doesnt have anything to do with the pits per se. An exchange member can trade in the pits, but they are a ghost-town nowadays, and for most products dont even exist anymore. It costs a couple of thousand $ per month, and gives you alot cheaper commissions. If you trade big enough, at some point the savings in commissions outweigh the cost of the lease. Thats all it basically does. If you are tired of paying the lease and have a couple of 100K to spare, you can buy a membersip outright. You still need clearing, backoffice and so on, hence the the need for a broker. Becoming a clearing member is different to that, and only really possible for big firms, since it requiers alot of staff and funding. Google "cme membership lease", plenty of info.
  • #11
  • Mar 27, 2012 9:53pm Mar 27, 2012 9:53pm
Thanks for the clarification.

Like I had said though I don't even think there is a PIT or ever was one for FX futures.

PIT trading should live on - I wish it would but, alas, it is a dying beast.
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
  • #12
  • Mar 27, 2012 9:55pm Mar 27, 2012 9:55pm
This is more along the lines of what I was trying to get at.

Thank you,
XT

Quoting Trader613
Exchanges, like CME, CBOT, NYMEX (CME Group) operate their own clearing house, with taking over counterparty risk of it's FCM's/Clearing Firms, but also offer a Clearing facility for OTC products via their ClearPort.

CLS (Continuous Linked Settlement) take over Settlement Risk on the FX market.

At any given time a clearing firm or bank being a member of CLS must have the means to be able to settle the counterparty transaction. For instance on spot-FX they would need to settle the trades with Valuta T + 2.

In answer to your question with...
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
  • #13
  • Mar 28, 2012 2:25am Mar 28, 2012 2:25am
I trade futures for 10 years already. But I also trade spot FX as there are no liquid futures contracts for exotics or even for EURCHF. By the way, there is a new fx exchange in town called LMAX where all trades are centrally executed and cleared. They are an FSA licensed exchange. If you have large accounts then go straight to them, if your accounts are less than 10k then you can use their introducing broker Armada Markets which opens an account with even 10 bucks and has better commissions than LMAX.

Now highly regulated markets like futures markets are not 100% bullet proof. If you have heard about MF Global then you know what I mean. Also Refco was a futures broker that went bankrupt. People lost some of their money on both cases. So if you want 100% protection then better hold your cash under the pillow or somewhere else. Or even better, spend your cash and live free as money will never make you happy
  • #14
  • Last Post: Mar 28, 2012 4:22am Mar 28, 2012 4:22am
I trade FX futures for my clients. Love the liquidity and transparency

I use AMP Global Clearing
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