What are Currency Futures Contracts?
Futures markets trade currency futures contracts. Futures contracts say that that the underlying currency will be bought or sold for a certain price on a particular date in the future. This future date is known as the expiration date. Day traders make money, or lose money, in a currency futures trade by calculating the difference between the buying price and the selling price. If the buying price is lower than the selling price, the day trader will make a profit. If the buying price is higher than the selling price, then the day trader will lose money. The day trader does not make a profit by actually owning the currency. It is also very important to know the currency futures expiration date, so that the currency futures trader does not have any open contracts on that date. Currency futures contracts can be used for intraday trading and swing trading.
