Spot, futures or forwards: what's the difference, and which do you trade?
Retail traders usually trade spot or CFDs. Futures trade on exchanges with expiry dates and fixed contract sizes; forwards are private agreements between two parties. The products behave differently even when the pair is the same.
Share:
- which product your account actually uses (it's in your broker's documents)
- whether the product choice affects how you trade
- anything that confused you about the difference
The spot, forwards, swaps and futures guide explains the four structures.
Background: Spot, forwards, FX swaps, options and futures: the forex products explained
FX swaps, not spot trades, are the biggest part of the $9.6 trillion-a-day currency market. A plain guide to each foreign exchange product, who uses it, and where retail CFDs fit.
What is the difference between spot and forward forex?
A spot trade exchanges currencies at today's rate, normally settling two business days later. A forward fixes a rate today for an exchange on a later date, with the difference from spot reflecting the interest rate gap between the two currencies.
What is an FX swap?
Two linked trades: exchanging currencies now and reversing the exchange on a later date at a rate agreed today. FX swaps are mainly funding tools and made up 42% of forex turnover in April 2025.
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