Foreign exchange futures speculation is divided into two types: short speculation and long speculation. The so-called short speculation is that speculators predict that the price of foreign exchange futures will fall, and then sell (open a position) and then buy (close a position), sell at a high price, and buy at a low price, so as to achieve profitability. Long speculation is that speculators predict that the price of foreign exchange futures will rise, buying first and then selling, buying at a low price, and selling at a high price to make a profit.

Functions of the foreign exchange futures market

Foreign exchange hedging. The hedging function of the foreign exchange futures market is the most important function of the foreign exchange futures market. The realization of this function is to reduce or eliminate risks in the future spot market by taking foreign exchange futures transactions in the opposite direction to the spot position. There are two ways of hedging, namely short hedging and long hedging.

Foreign exchange speculation. Speculative trading of foreign exchange futures is another important function of the foreign exchange futures market. Foreign exchange futures speculation is the act of profiting from changes in foreign exchange futures prices by buying and selling foreign exchange futures contracts while taking risks at the same time. The basic principle of speculative trading is that speculators buy or sell a certain number of foreign exchange contracts based on the prediction of the price trend of foreign exchange futures. If the price trend is as predicted, they can smoothly close the position at a certain price. The bid-ask spread of the contract That is profit; if the price trend is opposite to the predicted direction, then speculation will take risks, and the bid-ask spread is a loss.

Foreign exchange futures speculation is divided into two types: short speculation and long speculation. The so-called short speculation is that speculators predict that the price of foreign exchange futures will fall, and then sell (open a position) and then buy (close a position), sell at a high price, and buy at a low price, so as to achieve profitability. Long speculation is that speculators predict that the price of foreign exchange futures will rise, buying first and then selling, buying at a low price, and selling at a high price to make a profit.