foreign exchange
Foreign exchange is the creditor's rights held by the monetary management authorities (central bank, monetary management institutions, foreign exchange stabilization fund and Ministry of Finance) in the form of bank deposits, treasury bonds and long-term and short-term government securities. , which can be used when the balance of payments is in deficit.
Including foreign currency, foreign currency deposits, foreign currency securities (treasury bonds, treasury bonds, corporate bonds, stocks, etc.). ) and foreign currency payment vouchers (bills, bank deposit vouchers, postal savings vouchers, etc.). ).
future
Futures and spot are completely different. Spot is actually a tradable commodity. Futures are mainly not commodities, but standardized tradable contracts with certain mass products such as cotton, soybeans and oil and financial assets such as stocks and bonds as the targets. Therefore, the subject matter can be commodities (such as gold, crude oil and agricultural products) or financial instruments. The delivery date of futures can be one week later, one month later, three months later or even one year later. A contract or agreement to buy or sell futures is called a futures contract. The place where futures are bought and sold is called the futures market.
The difference between foreign exchange and futures
1, liquidity
The daily turnover of the foreign exchange market is US$ 4 trillion, making it the largest and most liquid market in the world. This market can be absorbed no matter how big the trading volume is, no matter how strong the trading ability is, it can include other markets, large and small. The daily turnover of the futures market is only a paltry $30 billion. The futures market cannot be compared with the foreign exchange market because of its relatively limited liquidity. The foreign exchange market is always liquid, which means that the position of the foreign exchange market will be shaken unless it is under very unstable market conditions.
2.24-hour market
At 5 pm on Sunday, the Sydney market opened. The Tokyo market opens at seven o'clock in the evening, and then London opens at three o'clock eastern time. Finally, new york opened at 8: 00 EDT and closed at 4: 00 EDT. Just before the new york market closed, the Sydney market reopened, which is a 24-hour uninterrupted market! As a trader, the 24-hour market can feed back good and bad trading information in time. At the close of the US futures market. If there are important data from Britain and Japan, then the next day's opening is likely to be similar to the "crazy express" market.
3. Minimum or zero commission.
Just as electronic communication brokers have become more and more popular in recent years, brokers have great opportunities to ask you for compensation. But in fact, the return you need to pay is not proportional to the money you put into the futures market. The direct competition between brokers is becoming increasingly fierce, so that you can get the best quotation and relatively low transaction cost in the futures market.
4. Price certainty
When conducting foreign exchange transactions, you can quickly execute relevant instructions and relatively determine the price under normal market conditions. On the contrary, the prices of futures and stock markets are extremely unstable, making it impossible to conduct real-time trading operations. Even if the emergence of electronic trading effectively ensures the speed of implementation, there is still a long way to go to have a relatively stable price in the futures and stock markets. The price quoted by the broker often represents the price of the last transaction, not necessarily the price promised in the contract.