Can I use FOREX markets to exchange cash?
Because the standard contract is for 125,000 euros.  http://www.cmegroup.com/trading/fx/g10/euro-fx_contractSpecs_futures.html You don't want to use Microsoft as an analogy. You want to use non financial commodities. Most are settled in cash, no delivery. But in the early 80's, the Hunt brothers caused a spectacular short squeeze by taking delivery sending the spot price to $50. And some businesses naturally do this, buying metal, grain, etc. no reason you can't actually get the current price of $US/Euro if you need that much. "As far as I understand, OP seems to be literally asking: ""why, regarding the various contracts on various exchanges (CBE, etc), is it that in some cases they are 'cash settled' and in some 'physically settled' -?"" The answer is only that ""the exchange in question happens to offer it that way."" Note that it's utterly commonplace for contracts to be settled out physically, and happens in the billions as a daily matter.  Conversely zillions in ""cash settled"" contracts play out each day.  Both are totally commonplace. Different businesses or entities or traders would use the two ""varieties"" for sundry reasons. The different exchanges offer the different varieties, ultimately I guess because they happen to think that niche will be profitable.  There's no ""galactic council"" or something that enforces which mode of settlement is available on a given offering - ! Recall that ""a given futures contracts market"" is nothing more than a product offered by a certain exchange company (just like Burger King sells different products). I believe in another aspect of the question, OP is asking basically:  ""Why is there not, a futures contract, of the mini or micro variety for extremely small amounts, of currency futures, which, is 'physically' settled rather than cash settled ..?"" If that's the question the answer is just ""whatever, nobody's done it yet"".  (Or, it may well exist.  But it seems extremely unlikely?  ""physically"" settled currencies futures are for entities operating in the zillions.) Sorry if the question was misunderstood."
"The other option apart from the above which I feel is quite good is ""Travel Card"" [also called Forex Card] issued in USD. These cards are like prepaid debit cards. They are available from almost quite a few Indian Banks like HDFC / ICICI / UTI. The limit for students is around 100 K USD per year.  http://www.hdfcbank.com/personal/cards/prepaid_cards/forexplus_card/pre_forex_elg.htm The card can be reloaded by any amount [i think the minimum is USD 100] by visiting the Branch or certain Forex agents. There loading fee is INR 75. The Fx is typical Card Rate prevailing on the day. In US this card can be used as a credit card for almost everything [I have used this without any hassel]. Avoid using the card for blocking anything [at Hotel for room booking, or initial block at car rentals]. Although its mentioned that there is a withdrawl fees, i was never charged anything for withdrawls. The card comes with an internet based login to monitor account balance and transactions. Any unused funds can be withdrawn in India. The payment will be make in INR." It is an undeniable fact that 95% of all retail forex traders lose money. In order to break free from this crowd of losing traders we must first understand the forex trading strategies they use. Only then can we learn how to trade forex profitably. I prefer to use a Foreign Exchange transfer service.  You will get a good exchange rate (better than from Paypal or from your bank) and it is possible to set it up with no transfer fees on both ends.  You can use an ACH transfer from your US bank account to the FX's bank account and then a SEPA transfer in Europe to get the funds into your bank account.  Transfers can also go in the opposite direction (Europe to USA). I've used XE's service (www.xe.com) and US Forex's service (www.usforex.com).  Transferwise (www.transferwise.com) is another popular service. US Forex's service calls you to confirm each transfer.  They also charge a $5 fee on transfers under $1000. XE's service is more convenient: they do not charge fees for small transfers and do not call you to confirm the tramsfer.  However, they will not let you set up a free ACH transfer from US bank accounts if you set up your XE account outside the US. In both cases, the transfer takes a few business days to complete. EDIT: In my recent (Summer 2015) experience, US Forex has offered slightly better rates than XE.  I've also checked out Transferwise, and for transfers from the US it seems to be a bit of a gimmick with a fee added late in the process.  For reference, I just got quotes from the three sites for converting 5000 USD to EUR: With your experience, I think you'd agree that trading over a standardized, regulated exchange is much more practical with the amount of capital you plan to trade with. That said, I'd highly advise you to consider FX futures at CME, cause spot forex at the bucket shops will give you a ton of avoidable operational risks. No, it's not a good idea. You started by saying you'd like to invest, but then mentioned something that's not an investment, it's a speculation. Both Forex and CFDs are not really investments. They are a zero sum game where over time, it's a pool of your money, the other trader's money, and the broker, redistributed over time.  If you truly wish to invest, you'll read up on the process, understand your own long term goals, and put aside X% (say 5-15) of your monthly income. You should look into investments that are long term, and will fund your retirement 30-40 years hence. Take a look at Everbank. They offer CDs and Money Market Accounts denominated in Euros for US residents.  https://www.everbank.com/personal/foreign-currencies.aspx Well it's not so simple as just swapping cash and assets. It has its unintentional effects. Such as encouraging debt, increasing inflation over a longer time period, decreased attraction from foreign investors.  And yea it drives valuations up, but it's making the assets overpriced. And we all know what eventually happens to overpriced assets. First I would be very careful using a short ETF.  There could be some serious tracking error, especially if its levered.  Second, when it comes to forex you are in the world of PIPS and high leverage.  You would need to have significant capital to be able to hold out the swings as banks do their interventions.  Plenty of people have been short waiting, and waiting, and waiting, unless you think you know something the market doesn't this seems like a pretty high risk strategy.  I'd suggest buying options instead, but they will be expensive given the volatility.