Trading takes place in currency futures, which are contracts that are requiring a standard quantity of an available currency with a fixed exchange rate when the contract is entered. Futures Contract are standardized contracts that trade on organized futures markets for specific delivery dates only. The delivery dates is set by the directors of the International Monetary Market (IMM). However with all the risks in the market, the Chicago Mercantile Exchange (CME) provides outlet for currency speculators and for people who is looking to reduce their currency risks. The CME is most active during the months of March, June, September, and December for delivery. Currently Japanese yen, Mexican Peso, Canadian dollar, British pound are available for currency future contacts. The CME is always experimenting with new contracts. Forward Contract is an agreement between a bank and a customer that calls for delivery at a fixed future date with a specified amount of one currency against dollar payment. The exchange rate is fixed at the time the contract is entered. Forward contracts are private agreements between individuals. The feature that makes futures contract different from forward contract is because the future market has easy liquidation, a high leverage of 2%, and is well organized in a stable market. However, Future Contracts have its disadvantages. Futures Contracts are limited to seven currencies, have a limited of delivery dates and rigid contract sizes.  Forward Contracts and Futures Contract have differences in trading locations, regulations, frequency of delivery, size of contract, transactions costs, quotes, margins, and credit risk. Some of the differences are explained. Forward Contracts are traded by telephone where Futures Contracts are traded in a competitive arena. The Forward market is self regulating while the IMM is regulated by the Commodity Futures Trading Commission. Contract sizes of Forward Contracts are much more smaller than Futures Contracts. The costs of the forward contracts are based on bids when futures contracts are based on brokerage fees for sell and buy orders.  Source: Shapiro, Alan C., and Atulya Sarin. Foundations of Multinational Financial Management. Custom Edition for California State University, Fullerton. New Jersey: John Wiley & Sons, Inc., 2009.