std bank currency futures

[_Marco_]

Can someone explain how you work out the standard bank derivative price for currency futures. I was keen to go long on the US/ZAR @ 7.25 earlier but i noticed that the prices trading were around 7.35.. How do u go about working what the equivalent of 7.25 is, i don't see any sort of matrix so im not 100% sure and do not want to trade it here unless i know the specifics. Also, how is the liquidity? Does std bank act as a market maker i.e always a buyer/seller at the ruling exchange rate? Would appreciate some answers,tx :)

[_Marco_]

Firstly i'd like to thank the std bank employee who gave me a call to explain the above. Excellent service and much appreciated, ty! He informed me that for some reason he could not make a post so he asked me to explain it here should there be anyone out there with a similar query.. I'm sure alot of you ponder how the actual rand/dollar price and the std bank us/zar price differ by about 9/10c. This is how they work it out.. Lets say at the current moment the us/zar is @ 7.27. As this is a futures contract there is time value of money involved so buyers and sellers are pricing in the interest component. To work out the value of this you need to determine the amount of days untill expiry of the contract - 15 march 2010, i.e from now 5 january till 15 march 2010 = 69 days. So u take the current spot 7.27 x (6.75%) x 69 / 365 = 0.09277 Take 7.27 + 0.093 = 7.36 So 7.36 will be the price at which buyers sellers should trade. If you are wondering where i get the 6.75% it is the SA repo rate of 7.00% - the US fed rate of 0.25% = 6.75% .. I am not 100% sure that these values are right but last i checked it was there about.. I was also informed as std bank play a role in ensuring liquidity so they will buy and sell at a spread of about 3c from the trading price. Hope this clears it up.. Thanks again