Futures are financial contracts stating that an asset, whether a physical asset or financial instrument, will be sold at a given time in the future. The contract describes what the asset is, how much of it will be sold, and the specifics of the exchange (e.g. whether it is settled in cash or the asset will be delivered in person). Along with forex and stocks, futures make up one of the biggest financial markets. But how does it compare as an investment path?

One major difference between forex and futures is volume and liquidity. The forex market is the biggest in the world, with $4 trillion being traded every day. In comparison, futures are only worth $30 billion daily. If you can’t wrap your head around the difference, let’s look at it another way: the forex market is over 133 times bigger than futures.

The reason that size matters is that it translates to better liquidity. Because it’s so big, the forex market allows much larger transaction sizes, and thus more money to go around than any other market. The futures market, being based on future transactions, has fewer funds available for trade at any given time. Forex allows you to liquidate positions or stop transactions any time, at no cost. This is important because it allows you to make snap decisions based on political, economic, or social events that can affect your currencies.

This leads us to the next point of comparison: flexibility. The forex market is more flexible than futures, an advantage it also holds over stocks. Different markets open and close at different hours, so that trading takes place 24 hours a day. If a major bank closes in London, Japanese forex traders can buy or sell their pounds even as the Tokyo market sleeps. Those trading futures, on the other hand, will have to scramble to make their move the minute the market opens. There is such a thing as an overnight futures market, but access is limited and there’s very little volume.

Finally, commission costs are generally lower in forex than in futures. Although you will have to pay commissions in either trade, forex fees are minimal compared to those paid by futures traders. Because there are lots of forex brokers, prices are lowered in response to the competition—the classic rule of supply and demand at play. There aren’t as many brokers in the futures market, so there aren’t as many forces driving down the rates.