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...Currency Futures Contracts are standardized contracts, with fixed, standardized contract sizes and fixed expiration dates, that are exchange-traded, i.e., traded as securities on organized exchanges.  Futures contracts have secondary markets, can be traded many times during life of contract, like a bond (vs. bank loan).   See Exhibit 7.2 on p. 167. Contract Examples: Yen contracts: ¥12.5m (approx $126,000), Pound: £62,500 (approx. $100,000), Euro: €125,000 (approx $160,000), SF: 125,000 (approx $106,000), etc.  Expiration dates: March, June, Sept, and December on the 3rd Wednesday. Note: If you wanted to hedge receipt/payment of £100,000, you would have to either do a partial hedge of £62,500 (1 contract) or "over-hedge" with 2 contracts for £125,000 total. Initial Performance Bond (formerly called margin): The initial investment required to establish a futures position.  To buy one U.K. pound futures contract, you would have to put up about $3,500, which is only about 3.5% of the contract value of $100,000.  You would also have to keep a "maintenance margin," usually 70-75% of the initial margin.  In this case, you could never let your account go below $2,600 (about 75% of $3,500).  If you can't make margin call, your contract is liquidated by broker.  Daily settlement (marked-to-market): Futures contracts are revalued daily depending on the daily settlement price (ex-rate).  Every futures contract involves a buyer (long) and a seller (short).  Buyer (seller) will gain (lose)...

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