Foreign exchange is the largest financial market in the world, with a daily trading volume of $5.3 trillion, covering all currencies in the world. There is no central exchange in the foreign exchange market, and all transactions are conducted "off-site".
The foreign exchange market operates seven days a week. When the transaction in one country's time zone ends, the market may not open until the other side of the world. For example, Sydney, Australia opens at 5: 00pm EST, Tokyo, Japan at 7: 00pm EST, London, UK at 3: 00am EST and new york, USA at 8: 00am EST. The closing time of the new york market coincides with the opening time of Sydney. So foreign exchange traders can trade at any time.
Foreign exchange transactions require high execution speed, and transactions can be carried out immediately. Therefore, traders can adjust their trading at any time according to the changes in the market, and the quotation you get is determined according to the real-time market conditions.
There is no minimum commission for foreign exchange transactions. Traders usually only need to pay the spread fee. At present, due to fierce market competition, most brokers can provide quite low spreads.
future
Futures contract is a kind of financial contract. The buyer and the seller agree to deliver the goods at a certain time in the future, and the buyer buys the futures contract, which means that they agree to buy the goods at a fixed price in the future, and the seller must sell the goods at the agreed price. The delivery date can be a week, a month, a quarter or even a year. Traders in the futures market can also conduct two-way trading.
Compared with the foreign exchange market, the futures market is much smaller, with an average daily trading volume of about $50 billion. Therefore, the liquidity of the futures market is far less than that of the foreign exchange market. Nevertheless, this part of liquidity can already meet the needs of most investors.
Unlike foreign exchange, futures trading must be conducted on an exchange. Chicago Mercantile Exchange (CME) has the largest trading volume of futures contracts. In addition, the Intercontinental Exchange (ICE) and the European Futures Exchange (Eurex) are also exchanges with considerable trading volume.
The delivery price of futures trading is uncertain. Futures trading usually does not take place immediately, so it is difficult for traders to know exactly how many commodities they can buy or sell.
Futures trading not only needs to pay the spread, but also needs to pay the commission, settlement and exchange fees. These costs can be accumulated quickly, and ultimately consume the profits of traders.