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CME 6E futures versus an EURUSD CFD lot: contract size, tick value and cost per round turn

The CME euro FX future (6E) is a contract of 125,000 euros. The minimum tick is 0.00005, which is $6.25 and half a pip. A full pip of 0.0001 is $12.50 per contract. So one contract moves like 1.25 standard CFD lots, where a lot is 100,000 and a pip is $10. The micro contract (M6E) is a tenth of that: 12,500 euros, $1.25 a pip.

Costs work differently. Futures charge a commission per contract plus exchange fees, and the quoted spread in liquid hours is usually one tick. Assume, purely as an illustration and not as a quote, $2.50 per side all in. Round turn is $5 per contract, or $4 per CFD lot equivalent (5 divided by 1.25), which is 0.4 pip. A raw CFD account with $7 round turn commission and a 0.1 pip raw spread costs 0.8 pip on the same lot.

That comparison isn't fair or final. A futures account needs a futures broker, margin is set by the exchange and the broker and changes with volatility, and the contracts expire quarterly. The figures above only show how to line the two up: convert contracts to lot equivalents, convert fees to pips, then compare.

A useful comparison. One more difference is that futures have a fixed expiry and need to be rolled, which adds cost and work every quarter. The roll itself has a price difference, related to interest rates, which replaces the swap charged on CFDs. Futures also trade almost around the clock on CME Globex, but liquidity in the Asian hours is lower than in spot FX. For traders in Asia who trade the European session, the futures can be a good option.

Margin is the other half of a comparison. 1.25 lots of EURUSD at 1.08 is 125,000 euros, which is $135,000 of notional. On a CFD account at 1:30, that needs $4,500 of margin. The futures margin for one 6E contract is set by the exchange and by the broker on top of it, and it moves with volatility, so I'm not going to give a figure here. The current number is on the CME website and on the broker's margin page. Put both in a table, because the account size you need depends on margin as much as on the cost per trade.

6E has quarterly contracts, March, June, September and December, and the front one expires on the second business day before the third Wednesday of the contract month. Volume normally moves to the next contract in the week or so before expiry. On a chart, a continuous contract stitches the contracts together at the roll, and the stitching can leave a price difference that shows up as a gap that never traded. If your strategy uses fixed levels, a stop or a prior high, check which contract the chart is showing, and roll positions yourself before expiry so you aren't left holding a thin contract.

A futures price carries the interest rate difference between the two currencies. Illustration: if dollar rates are 1.5 points above euro rates, a contract three months out trades above spot by about 1.5% times a quarter of a year, which is 0.375%. On a 1.08 spot that's about 40 pips. This isn't a cost you pay or a profit you make, since the premium shrinks toward zero by expiry, but it explains why the futures price and a spot chart differ. A CFD tracks spot and charges swap each night instead, so over a holding period the two carry the same cost in different forms.

Two more differences that matter for a scalper. Futures trade on an exchange with a visible depth of market, so you can see how many contracts are bid and offered at each tick, which a CFD price feed doesn't show. And a pip is two ticks on 6E, so the minimum price increment is half of what most CFD pip quotes imply. On the regulatory side, CFDs aren't offered to US residents, so futures are what's available there. For anyone outside the US, the choice between them is about costs, margin and how much you care about the order book.