Currency

Currency derivatives include forward contracts, currency futures, currency options, and swaps. Market participants use currency derivatives to hedge against currency risk or speculate on future exchange rate movements. They provide opportunities for risk management, speculation, and investment. Currency derivatives are regulated and involve market participants such as corporations, financial institutions, and individual traders. They offer liquidity, transparency, and require effective risk management due to currency volatility and other risks. Due to small margin requirements and lower entry barriers, currency derivatives are an important component of a retail investor's portfolio.