Market functions: 1. The hedging function of the futures market is the most important function of the foreign exchange futures market.
This function is achieved by taking the opposite direction of the spot position of the foreign exchange futures trading, to reduce or eliminate the future spot market risk.
There are two types of hedging, namely short hedging and long hedging.
2. Foreign Exchange speculation Foreign exchange futures Speculative trading is another important function of the foreign exchange futures market.
Foreign exchange futures speculation is the behavior of buying and selling foreign exchange futures contracts to profit from the changes of foreign exchange futures prices and bear risks at the same time.
The basic principle of speculative trading is that speculators buy or sell a certain amount of foreign exchange contracts based on the prediction of the future price of foreign exchange.
