Forex Vs. Futures

The forex market is approximately 46 times larger than the combined world futures markets. Greater day-to-day price stability enables trades with higher leverage than what is typical with futures.

Forex Provides More Leverage

• You control the degree of leverage you wish to employ in trading. Forex Capital Management automatically sets your leverage level at the most lenient requirement, based on the size of your account. As an example, a US$30,000 account has a margin requirement of US$1,000 for every position held that is approximately equal to US$100,000 worth of currencies. At this account level, 1% of the total value of the currency traded is required to be maintained on margin – a leverage ratio of 100 to 1.

Forex Provides Less Liability

• Forex Capital Management gives investors important peace of mind in the volatile currency marketplace. If the funds in an account ever drop below margin requirements, any open positions will be closed, protecting the account from catastrophic losses. In the event that your strategy proves to be wrong and there is a significant move against you, your liability will never exceed the value in your account.

Forex is Maximum Liquidity

• The forex market is the largest and most liquid in the world, with the spot foreign exchange market accounting for on average US$1.5 trillion in transactions every day. The foreign exchange market can absorb transaction sizes and trading volumes that dwarf the capacity of other markets. Stop-orders and liquidation of positions are executed without slippage.

Forex Trades 24-Hours a Day

• Forex trading is your window to the world economy. Trading starts on Sunday at 5:00 PM Eastern Time with the opening of the markets in Singapore and Sidney. A couple of hours later, the Tokyo market is open. Next is London, which opens at 2:00 AM Eastern Time on Monday. By the time the day catches up to New York, the world currency markets have been at work for fifteen hours. You determine the timing of your trades, reacting instantly to any news or market pressures.

Forex is Firm Prices and Instantaneous Execution

• Forex Capital Management enables price certainty and instant execution on orders up to US$1 million. Your trading is based on real time streaming currency prices so there is no discrepancy between the offered price and the execution price. This remains true even during volatile, fast moving trading sessions. Streaming prices ensure that your orders, stops, and limits are executed without partial fills or slippage.

Forex Enables Automatic Rollovers

• With Forex Capital Management, open positions are automatically rolled over every two days. At 5:00 PM Eastern Time, your account automatically rolls over any open positions, swapping the trade forward to a settlement date two business days in the future. Rolling over a position does include some carrying costs, which is true with futures as well. Rolling over a Forex position can sometimes make you money, since carrying cost is determined by the difference between interest rates for the two currencies. If you are long in the currency with the higher interest rate, you can gain on the spot rollover from the premium relationship of the long currency relative to the short currency. Gain is determined by the differential between the interest rates of the two currencies, and fluctuates with the movement of rates.