Limitations of Futures Contracts

The limitations of futures contracts are as follows:

  1. The fixing of quantity and delivery dates that is necessary for the future to be traded means that the customer’s risk may not be fully covered.
  2. Futures contracts may not be available in the currencies that the customer requires.
  3. The procedure for converting between two currencies, neither of which is the US dollar, can be complex.
  4. Volatile trading conditions on the futures markets mean that the potential loss can be high.

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