It is very interesting to note that a lot of people are spending lots of time in studying trading of forex, but at the same time, it is also evident that very few of them understand the basic forex concepts clearly. It is true that most of the people join forex in order to earn maximum profit, but they have very little knowledge about the concepts. In this post, the reader will be able to go through the most important aspect of forex trading which is forex futures contract size.
Introduction to forex futures contract size
Before trading in forex, one has to be very clear in different technical terms which help the trader to earn more and more profit. In this regard, it is important to mention that forex market across the globe accounts for more than $5 trillion US dollars’ worth of average trading volume on a daily basis.
This makes the biggest and largest financial market across the world. In this growing market, there is a very important concept known as forex futures contract size. Let’s get to know it in detail.
Forex futures contract size is the standardized futures contract which is mainly used to buy or sell any given currency at a specific time, date and contract size. These contracts are traded mainly at one of the several futures exchanges around the world.
To have a clear idea regarding this concept, one has to get an idea regarding what is being done in the trading of currency. Whenever a trader is buying a pair of currency for trading purpose in forex, then the person is actually buying a contract to exchange a certain currency for another.
Let us take an example.
Suppose a trader a buying a contract in order to buy EUR with USD. Now the contract size which is referred as the value per standard lot is actually the price of the contract purchased. It is usually 100,000 USD. So, if a trader is willing to purchase 1 lot, i.e., one contract of EUR/USD then the trader has to come up with 100,000 USD.
Different types of forex futures contract size
It is important to note that the traders are required to well aware of different types of forex futures and its types so that he/she gets help while initiating a position in forex trading and also to get maximum profit through investing less.
Apart from the popular futures contract like USD/EUR (US dollar/euro futures contract), there are some other futures contracts available like E-Micro Forex Futures contracts which usually trade at 1/10th size of regular futures contracts. In addition to that, there are other pairs available such as USD/PLN (US dollars/Polish zloty) and USD/RUB (US dollars/Russian ruble).
Hope the readers find this post helpful in order to understand the concept in detail. It is also necessary to note that apart from the given futures contracts there are other forex futures contract size available in the forex trading.
Always remember there is no substitute for learning. SO keep on learning!