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FX Cross-rate on Currency Futures


I understand that I can create a cross-rate artificially with Futures. Can you please give me a specific example of how to do that? The current FX broker I am using gives me abysmal execution on such a cross rate. Do you think that my execution performance will be better with the CME currency products?
Thank you for your help.


You can do that for the liquid contracts since all are based on a USD basis. For example, if you wish to trade long GBP/JPY, you would go long the 6B contract (British Pound FUtures) and short the 6J contract (Japanese Yen Futures). The USD cancels each other out, and you are left with a 6B/6J direct rate.

The limitation behind it is that you can not place a limit order unless you are using some sort of a synthetic spreader. So for most orders, you would need to use a market order, but you could leg in possibly if you watch this closely.

I hope this address your question.

Thank you,
Matt Z
Optimus Futures