The foreign exchange market allows individuals, firms, and banks to buy and sell currencies. Trading occurs globally through telecommunications between buyers and sellers located around the world. There are two main functions - clearing currencies by exchanging one for another, and providing credit by allowing time between a purchase and payment. Forward contracts and futures contracts are agreements to buy or sell currencies at predetermined prices and dates in the future. Participants include hedgers who avoid risk, speculators who accept risk for profit, and arbitragers who exploit small price differences across markets.