The market for currency derivatives has proven itself to hold various promising opportunities of gain. Although, they are not your usual platform for currency investments but it has gradually increased in popularity especially in the FOREX economy. While it is true that there is a considerable amount of risk when investing in derivatives but one should know that with great risks come great returns.
In fact, Derek Sammann, the Senior Managing Director at the CME Group particularly in the FOREX, Metals and Options department has made a very shocking statement. In fact, so shocking it was that the daily foreign exchange turnover has finally surpassed the EBS. And one should know that the average volume of EBS is at $150 billion daily. EBS has been considered to be the main platform in the CME group and yet derivatives were able to beat that. So, imagine only how derivatives have finally gained in the FOREX currency.
What led its mainstream popularity?
One should know that derivatives before were not that famous. However, during the onset of the 2008 financial crisis, traders have finally realized how volatile liquid investments and how effective derivatives could be. These are particularly financial contracts that may be in the form of options, futures or swaps. From here one, traders realize the importance of derivatives through the concept of counterparty risks. The counterpart risk involves a transaction between Trader A and Trader B in which the former sells a particular currency to the latter. Hence, the seller than will shoulder the counterparty risk until such time that the buyer will be able to pay.
Now given the convenience that such arrangement was able to offer, it has then deemed derivatives to be a better option when gaining currency in FOREX trading. With the advent of derivatives’ importance, more and more investors were being encouraged to such venues.
CME Group was able to capitalize on such an opportunity that they have found better ways to cross sell products on clients. And if they’re lucky, they might be able to upsell too. They have been in selling based from their energy franchises, metals and equity. This has been especially helpful for selected clients who are already keen on the underlying technology behind such capital investments.
Now more than ever, derivatives ultimately regard FOREX to have its very own asset class as the dynamics involved therein are now more focused and thorough.
About Traderdeforex.fr :-
traderdeforex.fr is a company of foreign exchange market, which fully focuses on the fluctuation of the foreign exchange rates. This company exchanges sales and purchases of investors in the course of a massive interbank market that is accessible internationally.