Currency Futures

  • Brendan Brown
  • Charles R. Geisst

Abstract

When Chicago’s International Monetary Market (IMM) launched currency futures trading in 1972, forward exchange markets had already been in existence for a century.1 Many of the ‘grey beards’ in the well-established forward market regarded the new entry with some scorn. How could this new currency market, which shared a floor with the pork belly and soyabean pits, situated in the depths of the mid-West, hope to compete with the highly liquid conventional market?

Keywords

Europe Income Assure Expense Volatility 

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Notes

  1. 1.
    See P. Einzig, A Dynamic Theory of Forward Exchange (London: Macmillan, 1975) ch. 1.Google Scholar
  2. 3.
    See J. M. Burns, ‘Electronic Trading in Futures Markets’, Financial Analysts Journal (February 1982) for a description of this particular type of abuse.Google Scholar
  3. 6.
    A swap transaction can be shown to be equivalent to a borrow and lend operation; see B. D. Brown, ‘The Swap Market and its Relation to Currency Forward and Futures Markets’, in Futures Markets, ed. M. E. Streit (Oxford: Blackwell, 1983).Google Scholar
  4. 9.
    See B. D. Brown, Money Hard and Soft (London: Macmillan, 1978) ch. 1, for an elaboration of this distinction.CrossRefGoogle Scholar
  5. 10.
    For a treatment of currency-risk hedging, see R. Z. Aliber, Exchange Risk and Corporate International Finance (London: Macmillan, 1978).CrossRefGoogle Scholar

Copyright information

© Brendan Brown and Charles R. Geisst 1983

Authors and Affiliations

  • Brendan Brown
  • Charles R. Geisst

There are no affiliations available

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