Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Futures Contracts – Buy or Sell?
- This topic has 3 replies, 2 voices, and was last updated 3 years ago by
John Moffat.
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- April 29, 2021 at 7:42 pm #619214
Dear Tutor,
I have watched the videos on Currency Futures, but it is still not clear when I have to buy and when I have to sell a futures contract?!
Could you please explain it shortly?e.g. Payment in USD in 3 months’ time => CC = USD => I do not have USD, therefore I “buy” the currency and therefore I “buy” the USD future contracts? And the same case with CC = GBP => I do not have USD, I have to “buy” the USD, but since my CC is GBP, I “sell” the GBP futures contracts?
And how about Receiving USD in 3 months’ time (UK based firm)?
If my CC = USD => I do not need the USD in the UK, so I “sell” the USD and therefore the USD futures contracts and if my CC = GBP, then I “buy” the GBP future contracts?Is this understanding correct?
Thank you!
April 30, 2021 at 7:59 am #619247I do not know what you mean by ‘CC’.
If you mean the contract currency (i.e. the currency in which the contract. size is quoted) then what you have written is correct 🙂
April 30, 2021 at 2:39 pm #619303Dear John,
Yes, by CC I mean contract currency, sorry for the confusion.
And thanks a lot for your quick response and clarification!Margarita
April 30, 2021 at 3:40 pm #619318You are welcome 🙂
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