The Using of Forex Chip in Futures Exchange
Exchange-traded contracts are standardized by the exchanges where the traders trade. The contracts details what assets is to be bought or sold, and how, when, where and in what quantity it is to delivered. The terms also specify the currency of forex chip in which the contract will trade, minimum tick value, and the last trading day and expiry or delivery month. Before the market open on the first day of trading a new future contract, there is a specification but no actual contracts exits. This may make the contracts destroyed in the opposite manner whenever open interest decreases because of traders resell to reduce their long positions or re buy to reduce their short position.
Speculators on future price fluctuations of forex chip who do not intend to make or take ultimate delivery must take care to ‘zero their positions’ prior to the contract’s expiry. After expiry, each contract will be settled. The contracts ultimately are not between the original buyer and the original seller, but between the holders of forex chip at expiry and the exchange. Because a contract may pass trough many hands after it is created by its initial purchase and sale, or even be liquated, settling parties do not know with whom they have ultimately traded.
