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Lot size for Forex Futures

  • #1
  • First Post: Sep 11, 2014 3:21pm Sep 11, 2014 3:21pm
What is the minimum lot size for Forex futures and how do they fare well in spreads?
  • #2
  • Sep 11, 2014 6:00pm Sep 11, 2014 6:00pm
Quoting junkone
What is the minimum lot size for Forex futures and how do they fare well in spreads?
Not sure what your question is.
Forex & Futures are different markets so there is no "Forex futures" you ask about.
Minimum size for forex is .01 lots but actual size is still dependant upon account type. So .01 can be 1 cent per pip or 10 cents per pip.
Minimum size for futures is 1 contract. One pt. move for euro(6E)=$12.50, one pt. move for pound(6B)=$6.25, one point move for aus.$(6A)=$10, one point move for Canadian$(6C)=$10, ES=$12.50, YM=$5, CL=$10, GC=$10, ZC=$12.50, ZS=$12.50, etc.......

With a good futures broker there's essentially no spread as there's no points between the bid & ask but there's only 4 points after the decimal with currency futures so bid=1.2930 & ask=1.2931. That's a $12.50 difference for Euro futures.
  • #3
  • Sep 11, 2014 10:21pm Sep 11, 2014 10:21pm
Quoting srt
{quote} Not sure what your question is. Forex & Futures are different markets so there is no "Forex futures" you ask about.
c'mon, guy, of course there are futures on fx and options on those contracts as well. thread starter, check out any of the futures brokers websites (see links) and you can find out what you want to know

http://globalfutures.com/

http://www.ampfutures.com/
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4
  • Sep 11, 2014 11:03pm Sep 11, 2014 11:03pm
I thought the best way is to play with my paper account with IB.
Here is a screenshot of my 1 options for Eur futures.
http://i.imgur.com/l8CM3cU.png

It costed me 164 pips for
BOT 1 EUR SEP14 1.28 Call Fut. Option (6E4) 0.01640 USD GLOBEX SEP 11 15:11:27 OptTrader 2.07


Does it mean that i payed 164 pips for eur futures expiring on sept 14 for 1 EUR or 100k EUR?
i am not sure where to get this info
Attached Image (click to enlarge)
Click to Enlarge Name: l8CM3cU.png Size: 14 KB
  • #5
  • Edited 4:29am Sep 12, 2014 4:19am | Edited 4:29am
Quoting The Fool
{quote} c'mon, guy, of course there are futures on fx and options on those contracts as well. thread starter, check out any of the futures brokers websites (see links) and you can find out what you want to know http://globalfutures.com/ http://www.ampfutures.com/

There are futures on currencies. (6E, 6B, etc...)
There are options on forex.
There are options on futures.

His question was "minimum lot size for Forex futures". Forex is a market, not a currency so "forex futures" is 2 markets.
Similar to asking "what is the distance to home plate for baseball softball?" They're 2 different games.

I stand behind everything I said in my first post.
***BTW, I go on your ignore list for trying to give someone an answer to a question? I guess no room for error since you have 463 on your list.
  • #6
  • Sep 12, 2014 6:44am Sep 12, 2014 6:44am
I am focussed on futures options. what is the lot size that i have bought options for. the position shows 1 but i dont know how it is calculated for?
  • #7
  • Sep 12, 2014 11:45am Sep 12, 2014 11:45am
Quoting junkone
I thought the best way is to play with my paper account with IB. Here is a screenshot of my 1 options for Eur futures. http://i.imgur.com/l8CM3cU.png It costed me 164 pips for BOT 1 EUR SEP14 1.28 Call Fut. Option (6E4) 0.01640 USD GLOBEX SEP 11 15:11:27 OptTrader 2.07 Does it mean that i payed 164 pips for eur futures expiring on sept 14 for 1 EUR or 100k EUR? i am not sure where to get this info {image}
I think part of the problem is you're mixing forex & futures. Both can trade currencies (euro, pound, etc...) but the position sizes are quite different. If you buy 1 futures contract of 6E (euro futures) that's approximately the same as buying 1 standard lot of EurUsd forex. Forex can be traded in much smaller sizes.

For the example you gave, you purchased 1 option for a cost of $2,063 so that's the maximum amount you can lose. If price of 6E is below 1.2800 @ expiration of the option, you've lost the total amount unless you exercise the option & convert it to 1 futures contract but no reason to do that as you can purchase the futures contract on the open market for less than 1.2800.
  • #8
  • Sep 12, 2014 12:30pm Sep 12, 2014 12:30pm
the price that i paid was 0.1642 + 2$ commission.
does it mean that i have the right to buy 1 futures contract @ 1.2800 even if it costs 1.400? and if it goes below 1.2800. i have just lost 0.1642?
  • #9
  • Sep 12, 2014 12:58pm Sep 12, 2014 12:58pm
Quoting junkone
the price that i paid was 0.1642 + 2$ commission. does it mean that i have the right to buy 1 futures contract @ 1.2800 even if it costs 1.400? and if it goes below 1.2800. i have just lost 0.1642?
Yes, you have the right to buy 1 futures contract @ 1.28 even if price goes to 1.400 but most of the time, it's better off to just sell the option @ a profit rather than convert it to a futures contract. The value of the option is going to keep going up along with the price of the futures contract. Buying a call is just a less expensive way to enter a market & have less risk to the downside if price should collapse. The price you paid for the option is already @ a premium to the futures price so you've actually paid more for the option than you could have paid for the futures contract but that's the price for having less @ risk. The shorter the expiration period, the lower the premium you have to pay but then the premium also deteriorates at a faster pace too. So the example you gave, you paid approximately 1.2964 when the price of the futures contract was lower than that.

Yes, if price falls below 1.2800, you've just lost the .1642 even if price drops to 1.1500. That's the nice thing about options but there's so much more I could tell you but I'd have a couple pages of stuff so best to just do some research on options.
  • #10
  • Sep 13, 2014 4:53am Sep 13, 2014 4:53am
Quoting srt
{quote} There are futures on currencies. (6E, 6B, etc...) There are options on forex. There are options on futures. His question was "minimum lot size for Forex futures". Forex is a market, not a currency so "forex futures" is 2 markets. Similar to asking "what is the distance to home plate for baseball softball?" They're 2 different games. I stand behind everything I said in my first post. ***BTW, I go on your ignore list for trying to give someone an answer to a question? I guess no room for error since you have 463 on your list.

No, you're wrong.

http://www.investopedia.com/terms/f/forexfutures.asp

http://en.wikipedia.org/wiki/Foreign...al_instruments

Spot on FX
Options on FX
Futures on FX
  • #11
  • Sep 13, 2014 4:57am Sep 13, 2014 4:57am
Quoting Unabletrader
{quote} No, you're wrong. http://www.investopedia.com/terms/f/forexfutures.asp http://en.wikipedia.org/wiki/Foreign...al_instruments Spot on FX Options on FX Futures on FX
You tell me which statement I made is wrong then I'll explain it.
  • #12
  • Sep 13, 2014 5:16am Sep 13, 2014 5:16am
You said
Quote
"so "forex futures" is 2 markets"

As I showed you, Forex Futures is one market as Forex spot.

http://en.wikipedia.org/wiki/Foreign...al_instruments

http://www.investopedia.com/terms/f/forexfutures.asp

Quote
Forex & Futures are different markets so there is no "Forex futures" you ask about.

You're a completely wrong.

Forex is one market where there are options, spot and futures. Therefore, Forex Futures aren't different markets.
  • #13
  • Sep 13, 2014 5:19am Sep 13, 2014 5:19am
You can trade Forex by using Futures, Spot, options.
  • #14
  • Sep 13, 2014 5:30am Sep 13, 2014 5:30am
Quoting Unabletrader
You said {quote} As I showed you, Forex Futures is one market as Forex spot. http://en.wikipedia.org/wiki/Foreign...al_instruments http://www.investopedia.com/terms/f/forexfutures.asp {quote} You're a completely wrong. Forex is one market where there are options, spot and futures. Therefore, Forex Futures aren't different markets.
I'll agree the term "forex futures" is used as one market but splitting the words creates 2 different markets(forex>>EURUSD, futures>>6E).
I think the work "forex" is at times loosely used to refer to "currencies" & at times refers to the market where currencies are traded. I just look at it as the marketplace for currency trading.

No need to continue discussing just over the definition of a term.
  • #15
  • Edited 5:55am Sep 13, 2014 5:33am | Edited 5:55am
Quoting Unabletrader
You can trade Forex by using Futures, Spot, options.

This is exactly why the confusion.
You see "forex" as all currencies. I see "forex" as a marketplace for trading currencies.
I agree you can trade "currencies" by using futures, spot, options.

Here is definition:
Definition of 'Forex - FX' The market in which currencies are traded. The forex market is the largest, most liquid market in the world with an average traded value that exceeds $1.9 trillion per day and includes all of the currencies in the world


In your post above you stated that "Forex Futures aren't different markets". So if that's true & you wanted to buy euro on "forex futures" market, what are you going to buy? EURUSD or 6E? You need to use a forex market to buy EURUSD or a futures market to buy 6E so they are 2 different markets.
  • #16
  • Sep 13, 2014 7:06am Sep 13, 2014 7:06am
How can we debate about that?

http://en.wikipedia.org/wiki/Foreign...al_instruments

http://www.investopedia.com/terms/f/forexfutures.asp

Does "Forex Futures" exist? Yes, end of story.


Quote
the words creates 2 different markets(forex>>EURUSD, futures>>6E).

Again you're wrong-

Forex =/= EURUSD.

Forex Spot = EURUSD
Forex Futures = 6E

Quote
You need to use a forex market to buy EURUSD or a futures market to buy 6E so they are 2 different markets

....?

If you want to buy spot EURUSD, you buy on FX spot. If you want to buy EURUSD futures contract (6E), you buy on FX futures.

When you talk with a Futures trader who trade FX futures only, he says "Forex" as you - as a Spot trader - you say "Forex".

Now, if you want to be specific, you use "Forex Spot" or "Forex Futures".

So when you said earlier:

Quote
Forex & Futures are different markets so there is no "Forex futures" you ask about.

You were wrong because There is Forex futures as Forex Spot.

Quote
This is exactly why the confusion.
You see "forex" as all currencies. I see "forex" as a marketplace for trading currencies.

Seriously, I don't care how you see forex.


[quote]According to the Bank for International Settlements,[4] as of April 2010, average daily turnover in global foreign exchange markets is estimated at $3.98 trillion, a growth of approximately 20% over the $3.21 trillion daily volume as of April 2007. Some firms specializing on foreign exchange market had put the average daily turnover in excess of US$4 trillion.[5]

The $3.98 trillion break-down is as follows:

  1. $1.490 trillion in spot transactions
  2. $475 billion in outright forwards
  3. $1.765 trillion in foreign exchange swaps
  4. $43 billion currency swaps
  5. $207 billion in options and other products[/quote]


So, there is no confusion.

Is a 6E-only trader a Forex Trader? Yes.
Is a EU only trader a Forex Trader? Yes.

Does FX Futures exist? Yes.

Are you still confusing?

http://en.wikipedia.org/wiki/Foreign...al_instruments
http://www.investopedia.com/terms/f/forexfutures.asp

You were wrong, it's not big deal.

  • #17
  • Sep 13, 2014 8:41am Sep 13, 2014 8:41am
Quoting srt
{quote} Yes, you have the right to buy 1 futures contract @ 1.28 even if price goes to 1.400 but most of the time, it's better off to just sell the option @ a profit rather than convert it to a futures contract. The value of the option is going to keep going up along with the price of the futures contract. Buying a call is just a less expensive way to enter a market & have less risk to the downside if price should collapse. The price you paid for the option is already @ a premium to the futures price so you've actually paid more for the option than...

Thanks for the detailed explanation. couple of clarifications
1. how did you arrive at 1.2964 as the price that i would have paid for the futures contract
2. what book would you recommend on forex options?
  • #18
  • Sep 13, 2014 9:47am Sep 13, 2014 9:47am
Quoting Unabletrader
How can we debate about that? http://en.wikipedia.org/wiki/Foreign...al_instruments http://www.investopedia.com/terms/f/forexfutures.asp Does "Forex Futures" exist? Yes, end of story. {quote} Again you're wrong- Forex =/= EURUSD. Forex Spot = EURUSD Forex Futures = 6E {quote} ....? If you want to buy spot EURUSD, you buy on FX spot. If you want to buy EURUSD futures contract (6E), you buy on FX futures. When you talk with a Futures trader who trade FX futures only, he says "Forex" as you - as a Spot trader...
We'll just agree to disagree.
  • #19
  • Sep 13, 2014 10:07am Sep 13, 2014 10:07am
Quoting junkone
{quote} Thanks for the detailed explanation. couple of clarifications 1. how did you arrive at 1.2964 as the price that i would have paid for the futures contract 2. what book would you recommend on forex options?

The 1.2964 I got from the numbers you gave me. You bought the 1.28 call for .01642 so adding the 2 together gets you 1.29642 but futures markets drop the last digit so 1.2964.


Recommended options reading, I would use investopedia.com (http://www.investopedia.com/articles/forex/11/forex-options-basics.asp) or any other "options" searches on the web. There are many other options pages on investopedia also so just keep reading.

Before you even begin studying options though is to make sure you understand the difference between options on futures(6E) & options on forex (EURUSD). I'll just let you read about it but just wanted to make you aware there's a difference.
  • #20
  • Sep 13, 2014 11:00am Sep 13, 2014 11:00am
Ok. I use IB and it gave me options for the Forex Futures and they charge 2$ commission for it. How does options for Forex Spot lile EURUSD work? where can i find trade and commission info?
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