FX Position Management

Transaction Types

CME FX futures trading occurs in three venues — open outcry in the pit on the exchange floor, electronically on the CME® Globex® trading platform, and through Exchange-for-Physicals (EFPs) transactions. Futures exchanges historically were known for their pit-traded price discovery, but in recent years with the advent of new technology, futures products are now also widely available through electronic trading platforms.

In 1992, CME launched its CME Globex electronic platform for futures trading. Initially designated for after-hours electronic trading, the CME Globex platform now offers access to CME currency futures virtually 24 hours per day during the FX trading week. Retail traders can access all trading functions via various futures trading applications available through CME and CME-affiliated futures brokerage firms.

EFPs mainly serve institutional market users. An EFP is a transaction in which one party buys a currency position on the OTC (cash) market and sells the related futures contract, while the opposing party sells the cash currency and buys the FX futures contract. The terms, which include price and quantity, are privately negotiated by the involved parties and reported to the CME Clearing House according to stated exchange rules. EFPs offer institutional users a flexible means to move between cash and futures positions, or to fulfill delivery agreements.

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