When we refer to the Forex market we usually refer to the Spot FX or Spot Forex market. The Spot FX is a large Over The Counter (OTC) market that consists of thousands of Interbanks, institutional investors/traders, brokerage firms, and millions of retail traders. This market refers to the cash market of Forex. Although the Spot FX contracts settle within 2 days of the contract they are based on the current global price of the currencies. What you actually pay to purchase a currency against selling the other is the manipulated price by your market maker which is usually a brokerage firm.

A Forward FX contract refers to a future price of a currency pair. For example the price in 7 days from now. Such contracts are still Over The Counter meaning that there is no official exchange or clearing house for them.

A Futures FX contract is similar to a forward contract. However, it is traded on an exchange such as Chicago Mercantile Exchange (CME) in USA or Montreal Exchange (or rather Bourse de Montréal) in Canada.

An Option FX gives the buyer of the contract the right but not the obligation to buy or sell a specific volume of a currency pair at a specific price within a specific time frame (for example in the next 3 months). You may trade Option FX contracts on an exchange or Over The Counter.

The rules that govern exchange traded Option FX and Futures FX contracts could vary from country to country or even from exchange to exchange.

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