Because forex is so awesome, traders came up with a number of different ways to invest or
speculate in currencies. Among these, the most popular ones are forex spot, futures, options,
and exchange-traded funds (or ETFs).
Spot Market
In the spot market, currencies are traded immediately or "on the spot," using the current
market price. What's awesome about this market is its simplicity, liquidity, tight spreads, and
round-the-clock operations. It's very easy to participate in this market since accounts can be
opened with as little as a $25! (Not that we suggest you do. In the Capitalization lesson, you'll
learn why!) Aside from that, most brokers usually provide charts, news, and research for free.
Futures
Futures are contracts to buy or sell a certain asset at a specified price on a future date (That's
why they're called futures!). Forex futures were created by the Chicago Mercantile Exchange
(CME) way back in 1972, when bell bottoms and platform boots were still in style. Since
futures contracts are standardized and traded through a centralized exchange, the market is
very transparent and well-regulated. This means that price and transaction information are
readily available.
speculate in currencies. Among these, the most popular ones are forex spot, futures, options,
and exchange-traded funds (or ETFs).
Spot Market
In the spot market, currencies are traded immediately or "on the spot," using the current
market price. What's awesome about this market is its simplicity, liquidity, tight spreads, and
round-the-clock operations. It's very easy to participate in this market since accounts can be
opened with as little as a $25! (Not that we suggest you do. In the Capitalization lesson, you'll
learn why!) Aside from that, most brokers usually provide charts, news, and research for free.
Futures
Futures are contracts to buy or sell a certain asset at a specified price on a future date (That's
why they're called futures!). Forex futures were created by the Chicago Mercantile Exchange
(CME) way back in 1972, when bell bottoms and platform boots were still in style. Since
futures contracts are standardized and traded through a centralized exchange, the market is
very transparent and well-regulated. This means that price and transaction information are
readily available.