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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!
I 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 🙂
Dear John,
Yes, by CC I mean contract currency, sorry for the confusion.
And thanks a lot for your quick response and clarification!Margarita
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