COMMERCE 3FC3 Study Guide - Final Guide: Hong Kong Futures Exchange, Notional Amount, Singapore International Monetary Exchange
19 Oct 2020
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Document Summary
Chapter 8 - currency futures and options markets. International monetary market: a division of the chicago mercantile exchange (cme) that deals with the trading of currency and interest rate futures. Started in 1972 when the cme and imm merged: trades the major currencies, like the usd, british pound, euro, Cad: purpose: to provide a stable market in the exchange of currency futures. The imm (international monetary market) provides: an outlet for hedging currency risk with futures contracts. The definition of a futures contract (which is written w/ 3 things): a standard quantity of an available currency, at a fixed exchange date, at a set delivery date. Available futures contracts: there are 20, and has cross-rate contracts, currency quotes that do not involve usd. Transaction costs: must pay commission to a floor trader. Leverage is high: only need <2% of contract value for margin.
