Currency Futures and symbols.

[Jyde]

Hi all, this is going to be one of those very daft question for those in the know, but alas... if someone could clear this up for me, I would appreciate it.

When spreadbetting the Eur/USD and Cable, I use the futures to get the actual price - and they actually match pretty accurately.
I use symbols 6E or 6B from CME (for eSignal, but pretty much standard. The '6' only means that night-data is included, ie. 6E instead of EC)..

The problem arises when I try to get a some live prices for other crosses. Take for example Yen. If I take the Yen futures index (JY), I get a smooth curve with lots of action, though the price does not match those of the broker.

I figure then that they are showing the cross and go to get those prices instead (YY). Now the prices match but there is hardly any action (it shows something like one, maybe two updates a day).

I know, I should have figured this out a long time ago, though I am only recently trying to expand a little on the currencies. I guess I have just been lucky so far that I started out with the two pairs that worked for me.

If anyone could shove this dunge towards the light, please...?

All the best...

 

[Roberto]

If anyone could shove this dunge towards the light, please...?

Doubt it, because I'm probably more in the dark than you. But if we start a conversation, doubtless someone will promptly appear to shout and scream at me as always, and tell me I've screwed up, so we might get to some proper answers that way ...

When spreadbetting the Eur/USD and Cable, I use the futures to get the actual price - and they actually match pretty accurately.

When you say they match pretty accurately, you mean that the futures prices on your feed matches the SB firm's spot prices?

I don't use eSignal any more (switched to ProRealTime months ago: I find it much better and much less expensive). My feed offers "spot prices" for currencies. I fully appreciate that they can't be monitored as reliably as for instance those of an index, but my impression is that they're compiled from feeds from a lot of banks. And I think that's how the SB firms get their prices, as well. In my experience, the SB price is always the same as my "live feed price" for EUR/USD and Cable anyway, exactly as you say.

With other (preumably less liquid?) pairs, especially those involving the JPY, that isn't always the case. But if there's a discrepancy, it isn't one that changes during the day, so I don't pay ant attention to it at all. If my SB price is "too high/low" when I open any position, it's going to be "too high/low" by exactly the same amount when I close it as well, so it will all even out. Which is why I don't think about this much. Which is why I can't answer your questions properly!

Take for example Yen. If I take the Yen futures index (JY), I get a smooth curve with lots of action, though the price does not match those of the broker.

When you say it doesn't match those of the broker, are we just talking about a few pips and always in the same direction? Or something more complicated?

Doesn't eSignal have "spot price" charts for USD/JPY and EUR/JPY and GBP/JPY?

I figure then that they are showing the cross and go to get those prices instead (YY). Now the prices match but there is hardly any action (it shows something like one, maybe two updates a day).

I have lost you ... sorry. Why do you need to look at this YY chart anyway? (One or two updates a day is obviously no use to anyone!).

I know, I should have figured this out a long time ago

If you're anything like me, you never get round to "what's not really needed" at all. I am completely ignorant about all sorts of things that I don't use myself.

Sorry not to be of any more help regarding your unanswered questions above!

 

[Jyde]

Doubt it, because I'm probably more in the dark than you. But if we start a conversation, doubtless someone will promptly appear to shout and scream at me as always, and tell me I've screwed up, so we might get to some proper answers that way ...

I have noticed that it seems to happen a bit, yes... not just for you, mind you...

When you say it doesn't match those of the broker, are we just talking about a few pips and always in the same direction? Or something more complicated?

I have lost you ... sorry. Why do you need to look at this YY chart anyway? (One or two updates a day is obviously no use to anyone!).

More complicated, at least for me. Let me see if I can explain myself a little clearer:
When trading Cable, I use the future index from CME. My SB broker states the market as GBP/USD, so technically I guess we are talking about two different instruments, though they alway fit, usually to the pip.
If I want to get something similar for the JPY, I get the futures index from CME as well, though here there is a clear difference between JPY index and the USD/JPY that the brokers make available to trade. For example, the JPY future currently is at 9558, whereas the borker's JPY/USD March is at 104.50 - so definately not a few pips but rather something totally different.
I wonder if it is just the direction, ie. the CME future shows USD/JPY as opposed to.. wel, opposed.

I CAN get the USD/JPY direction future from CME as well, and that is the YY that has only one or two dots a day, so no good in pracsis.

If you're anything like me, you never get round to "what's not really needed" at all. I am completely ignorant about all sorts of things that I don't use myself.

Oh, but isn't that the stage we all long to be at? Until we need some info, that is... haha.

But you have helped. I think I have to pay additional to get the forex spot on eSignal, but I will look into it. One got to have the right tools available, otherwise money goes out.

Thanks for taking the time!

 

[Roberto]

I think I have to pay additional to get the forex spot on eSignal, but I will look into it.

Probably you should find out about it, anyway ... but also take a look at www.ProRealTime.com . I much prefer it to eSignal. The "currencies and indices" package is 49 Euros per month. They do a week's free trial, which is genuinely free (no credit-card details asked for until you want to subscribe). If you can make eSignal work, you'd have absolutely no difficulty using PRT at all, that's for sure, because even I can cope with most of it. Just a thought, and of course there might be loads of other things for which you need eSignal specifically in which case it might be a stupid one. Not sure what I'm doing in a thread with the word "Futures" in its title, really ...

 

[Jyde]

Probably you should find out about it, anyway ... but also take a look at www.ProRealTime.com ....

Probably should have but now I won't even look... actually, I will refuese to look!
Why? Because I juse pre-paid eSignal for a year advance!

Thanks anyway... I bet I will get tempted to look, just to torture myself.

I will definitely look into the spot prices - that is still good advice.

Jyde

 

[Jyde]

OK, I had to read your posts a couple of times, but I now think I know what's confusing you. So, in as few words as possible, it works like this.....

1) In the world of forex, most major currency trading is vs the US dollar.

2) In most cases, the dollar is commonly quoted as the 'base currency'. I.E. a usd/jpy rate of 104.50 implies that one dollar will buy you 104.5 Yen.

3) HOWEVER, there are a few notable exceptions to this. Both Sterling and the Euro are quoted inversely. They are quoted as one Euro buying roughly $1.31 etc etc. Aussie and Kiwi Dollars are also quoted similarly.

4) In the futures markets, you are trading the strength of these 'non dollar' currencies against the dollar. So the contracts are structured so that if you buy one, and that currency strengthens, the price will go up, and you will make money.

5) This therefore works fine with eur/usd and gbp/usd quoted in their conventional way (i.e. with euro or sterling as the 'base'), as a move from 1.3100 to 1.3200 is implying a stronger euro.

6) But (and here's where your problem is), that doesn't work for usd/chf, usd/jpy etc, which are quoted in interbank circles with the dollar as the base. So the futures markets get round this by inverting the quote.

7) So if one dollar buys JPY 104.5, that implies that 1 Yen will buy $0.009569 (1/104.5)

8) But that's a rubbish number to have as a futures price so it gets multiplied up by a factor (in this case 1,000,000) to give 9569.

9) "AH" I hear you say, "but my screen said 9558". Well that's because your price is a futures price, and as such won't necessarily be the same as the 'spot' price as you have to take into account interest rate differentials.

But anyway, thats how your JPY price is arrived at.

Your 'YY' future that appeared to have the 'right' price is probably a live, dollar based future that no-one really trades (but I'm guessing)

Hope that helps - sorry it was a tad verbose, but I thought the best way to explain it was step by step.

GJ

Thank you ever so much!
You were completely right, when I got to pt.8, I was indeed saying 'Ah', though not due to any price difference but because I finally got it.
Thank you for hammering it home for me, it makes perfect sense now.
Conclusion - which I already had a hint of thanks to Roberto - is that for trading EUR and GBP (and USD index) the futures are fine, though with the slight difference to the spot prices, but for anything else, no way around the spot prices.

And as for verbose -well, it took nothing less for this person to finally get it!

 

[Jyde]

Jyde - one thing you may find useful is the CME E-quivalents service. This is a service that converts the CME prices to their spot equivalents (hence the catchy name).

Check it out via the CME website. Bear in mind the fact that I think you have to put the negative of the forward points in if memory serves.

Hope it helps
GJ

Thanks once again, most helpful!
I have, however, decided that since I am looking to be trading other pairs, I have paid up for the forex data - no way around it, really.

But I will still try it out, it seems really useful.

All the best...