Discover the advantages of trading foreign exchange in a marketplace that is defined by you, delivered by us. With CME FX options on futures, enjoy the versatility and 24-hour access that you already know with security, transparency and certainty of the world’s largest regulated FX marketplace.
Whether you want a hedge against any potential losses or offset adverse prices changes, or are seeking a stream of premium income or to profit from opinions on market direction, CME FX options offer added benefits to help you achieve your goals.
Transparency
Get the same prices, quotes and trades as the world’s largest bank or active trader across the world, enabling equal footing
Liquidity
$10B in daily FX options liquidity, with significant volume during the Asian trading day, and $111B+ in daily CME FX liquidity
Security
Add certainty of knowing every trade is CFTC-regulated, must pass a series of risk controls and is centrally cleared to remove counterparty credit risk
Futures-Settled
At settlement, you will have an active futures position. That gives you flexibility to keep working a capital-efficient position or to offset your position to cash.
Trade all the major currencies paired with U.S. dollars, a key feature that alone presents trading opportunities, with U.S. interest rates expected to head higher.
| EUR/ USD Euro |
JPY/ USD Japanese yen |
GBP/ USD British pound |
CAD/ USD Canadian dollar |
AUD/ USD Australian dollar |
NZD/ USD New Zealand dollar |
|
| Contract Size | 1 futures contract 125,000 euro |
1 futures contract 12.5 million yen |
1 futures contract 62,5000 pounds |
1 futures contract, 100,000 Canadian dollars |
1 futures contract 100,000 Australian dollars |
1 futures contract, 100,000 New Zealand dollars |
| Expiries | Weekly and monthly expirations for premium-quoted contracts (PQOs) Weekly and monthly for volatility quoted expirations (VQOs) |
Weekly and monthly expirations (PQOs only) | ||||
| Fixing Time (need to convert to local times) |
PQOs: 10 a.m. NY VQOs: 10 a.m. NY | PQOs: 10 a.m. NY | ||||
| Minimum Tick Size (if five ticks from premium, reduced ticks available) |
$.0001 per euro increment |
$.000001 per yen | $0.0001 per pound increment |
$0.0001 per CAD increment |
$0.0001 per AUD increment |
$0.0001 per NZD increment |
| Dollar Value of a Tick | $12.50 | $12.50 | $6.25 | $10.00 | $10.00 | $10.00 |
| Settlement | Physically settled into cash-settled futures contract | |||||
| Allows Contrary Exercise? | Contrary exercise (ability to exercise out-of-the-money or abandon in- or at-the-money options at expiration for trading strategy purposes) is allowed in some, not all, options. More on contrary exercise │ See which contracts offer it | |||||
FX Futures |
Benefit |
Cash FX |
|---|---|---|
Over $111B in daily notional traded complex-wide, with $10B in FX options |
Liquidity and |
$5.3T traded daily but is highly fragmented globally |
|
Regulated, Centralized Market |
Face counterparty & execution risk |
See same prices, quotes, trade firm liquidity |
Level-Playing Field |
Little to no transparency, last look commonly used |
Plus known, universal margin requirements |
Fully Disclosed Fees |
Spreads often built into prices, varying margin/credit charges subject to counterparty |
Trades regulated, centrally cleared |
Safety & Security |
|
Fast trade executions, confirmations & straight-through processing |
Speed & Performance |
Depends |
Futures |
Benefit |
CFDs |
|---|---|---|
24-Hour Access |
||
Everyone sees same prices, quotes, trades volumes |
Centralized, Transparent Marketplace |
Broker is lone counterparty |
All prices are built into spread |
Added Financing Costs |
Daily interest charged on open positions, |
Futures broker is intermediary only; commission-based |
Conflict of Interest |
Broker may profit if your trade loses |
All trades are backed by CME Group, with risk shared among clearing members |
Safety & Security |
Broker is lone counterparty – exposed to higher counterparty risk |
$111B in daily CME FX liquidity |
Liquidity You Can Count On |
|
CFTC-regulated market available in over 150 countries |
Availability by Regulation |
Banned in many countries, including U.S. and Belgium |
Certainty of size, quantity, date, etc. promotes greater trading certainty |
Standardized Contract |
Terms can vary widely from trade to trade |
Leveraged/Margin Trading |
Get to know more about your trading options, including how to add FX options to your trading strategies.
-
-
Introduction to Options Course
- Discover how options on futures can help you mitigate downside risk and diversify your portfolio. Covers basic fundamentals to knowledge you need to start tackling market opportunities.
-
-
-
Trader’s Edge: FX Options & Volatility
- See how to use options to benefit from moving FX markets.
-
Weekly FX options give you more control and shorter-term precision for managing positions ahead of mid-week market-moving events and reports like central bank announcements.
CME Group’s Senior Economist Erik Norland looks at global trade tensions and political unrest in Europe, and how it may affect currency options. Options volatility is at near record lows for all six major currencies versus the dollar but emerging market currencies, from the Argentine peso to Turkish lira and Brazilian real, are wobbling in what could be a harbinger of heightened volatility.
Newly enhanced In Focus newsletter offers timely strategies and insights for trading FX options and other liquid CME Group futures and options markets. Now packed with even more resources and Redsky market alerts to help you navigate changing markets.
Delivered free to your inbox at 6:00 a.m. SGT for free.
© 2024 CME Group Inc. All rights reserved.