Many forex traders (or would-be forex traders) look askance at trading in the spot market, especially through dealing brokers – those who make direct markets to their customers as opposed to the ECNs who are just pass-through conduits. The noted concerns are the idea that the broker is trading against them and that the market is unregulated. This leads them to the futures market.
I’ve discussed the the pluses and minuses of spot forex trading vs. forex futures trading previously. One of the major advantages of the former is that the existence of micro contracts and the like allows new traders and those with lightly capitalized accounts to play at a sufficiently small size. Futures don’t really offer those “micro” contracts.
Well, until now anyway.
One note at this point, however. The micro contracts only cover the major currencies against the USD. They do not include any crosses. Also 1/10th sized contracts may still be larger than ideal for small traders. The sizes are as follows:
EUR/USD: 12,500 EUR
USD/JPY: 10,000 USD
GBP/USD: 6,250 GBP
USD/CAD: 10,000 USD
AUD/USD: 10,000 AUD
USD/CHF: 10,000 CHF
As you can see, these are really what most spot forex traders would equate to mini contracts, not micros.