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How do you “sell” currency futures when you don’t have them in the first place?
When using futures for hedging, you are not actually buying or selling anything. You are simply ‘gambling’ on the change in the futures price.
If you give the dealer a ‘buy’ instruction then you must at a later date give a ‘sell’ instruction.
Similarly is you give the dealer a ‘sell’ instruction, then you must at a later date give a ‘buy’ instruction.It is only at the end of the deal that you receive from the dealer any gain due to the change in the futures price, or pay to the dealer any loss due to the change.
(At the start of the deal you have to pay a deposit (called a margin) to the dealer, but you get that back at the end of the deal together with any gain or less any loss.)
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