Options One and Three—Replacing Cash Forex Markets with Futures Markets or Currency ETFs/ETNs

The first and third options are solutions of a sort but they are only a partial help in so far as a number of currency crosses in the cash foreign exchange markets do not have liquid equivalents in the futures markets or the currency ETFs/ETNs. As a result, a trader resorting to these counterpart markets for volume is obtaining data that may be very unrepresentative of the actual cash volume equivalent. The significance of this will again be addressed in the next chapter.

For example, as can be seen in Table 10.1, as of September 2009 fewer than 40 ETFs/ETNs were available for trading in the United States, and of those available the daily volume averages ...

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