Currency Futures

Starting this article, I hope you are already familiar with what futures are, and specifically currency futures. We will look at currency contracts traded on the CME (Chicago Mercantile Exchange), since trading volumes on other exchanges are very small compared to the CME, and therefore it makes little sense to consider them.

The most popular instruments among traders are currency futures for the major currencies: the euro (EUR), Japanese yen (JPY), British pound (GBP), Swiss franc (CHF), Australian dollar (AUD), Canadian dollar (CAD), and New Zealand dollar (NZD) — that is, all the major Forex pairs. This is because they have the largest trading volumes on the CME and the highest liquidity. Cross rates, mini (micro) contracts, and emerging market currencies are less popular due to very low liquidity.

Contango, Backwardation, and Basis

The price of a futures contract is based on the price of the underlying asset — in our case, the price of the currency pair on the Forex spot market. If the underlying asset on the spot market is, for example, 1.39400, then at the time of the futures contract’s expiration its value will also be 1.39400. However, before expiration, the prices of the underlying asset and the futures contract may differ.

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If, before expiration, the price of a futures contract is higher than the price of the underlying asset, this is called contango. If the price of the futures contract is lower than the price of the underlying asset, this is called backwardation. The basis is the difference between the price of the futures contract and the underlying asset. The further the expiration date, the larger the basis; conversely, as the expiration date approaches, the basis decreases and tends toward zero.

Futures on Major Currencies

Futures on Emerging Market Currencies

Futures on Cross-Currency Pairs

Futures on Mini Contracts (E-mini)

The size of a mini contract is half that of a full contract. Remember that mini contracts trade as separate instruments, with their own prices and generally very low trading volumes.

Futures on Micro Contracts (E-micro)

A micro contract is one-tenth the size of a full futures contract. Micro contracts trade as separate instruments, and due to their low popularity, they have low trading volumes and liquidity.

Contract Expiration

It is important to always remember that futures are derivative instruments with an expiration date. Some futures have monthly contracts, while others are quarterly (three months). A trader must always know the expiration date of the contract they are trading and, as the expiration approaches, close positions in time; otherwise, their trades will be closed automatically.

The main currency futures on the CME exchange have quarterly contracts. Expiration occurs every three months: March, June, September, and December.

Decoding Futures Codes

The month codes for futures contracts are as follows: F – January, G – February, H – March, J – April, K – May, M – June, N – July, Q – August, U – September, V – October, X – November, Z – December.

Examples of decoding futures ticker codes:

Comments

PIt
PIt 2025-07-16 21:55:13 #
I only just learned that there are futures for micro contracts and cross pairs.
arhi7Dnaq
arhi7Dnaq 2025-10-04 07:32:30 #
The liquidity for these is so low that you can barely trade them properly. If you really want to trade the cross, stick to the spot market (regular forex) rather than futures. The same goes for micro currency futures — their liquidity is really tiny.
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