11th Floor Aggarwal Millennium Tower, 2Netaji Subhash Place Pitampura Delhi-110034

011-47001200

currency

 

Banks / MF

Importer

Exporter

Traders

 

Low Transaction

Charges Low

Brokerage Fixed settlement as per RBI reference rate

Good Arbitrage Opportunity

Cost of carry is low

 

Change in Interest Rates

Prices of Crude Oil

Inflow of Foreign Funds

Natural Calamities

Political Environment

 

Trade on a regulated and efficient platform

Allow for transparent pricing

Equalise the playing field for investors

Allow individuals and smaller corporates to access favorable rates usually reserved for larger corporates

Represents a relaxation of exchange controls for individuals and corporate entities

Less administration for corporates

Indian currency exchange will soon start trading in EURO, YEN & POUND also, and the option contracts too will be launched sooner

Inflow of Foreign Funds

 

NSE quotes all currency future prices in the same way as the underlying spot exchange rate

This is represented as the number of rupees per foreign currency quoted to four decimal places, e.g. INR 49.1175 to 1$

Last working day for each contract is two working days prior to the contract expiration date

Contract Expiration Date for each contract is the last working day of the month

All the contracts will be settled in INR

 

Underlying Instrument

Rate of exchange between one US Dollar & Indian Rupee

Standardized Contracts

Contracts open for 12 consecutive month with fixed monthly expiries

Rupee Denominated

Contracts quoted in INR per one underlying foreign currency (e.g. US Dollar) to four decimal places

Cash Settled

No physical delivery of foreign currency

Contract Sizes

1000 foreign underlying currency e.g. $1000

 

If an investor has a view on which direction the currency is going to move, the investor needs to contact their broker to transact on their behalf

To close the contract, they enter into an equal but opposite transaction

For example, if an investor had bought a currency future contract, the investor would close out the trade by selling the contract

 

Profit Trades Lose Trades
Buy Low-Sell High Buy High-Sell Low
Sell High-Buy Low Sell Low-Buy High

 

Profit /Loss is calculated at the end of day on closing price (fair value)

Position holders of profitable trades receive Variation Margin

Position holders of loss trades pay in Variation Margin

 

 

All investors who wish to hold their positions beyond the expiry date will be required to roll their positions over into the next expiry date

Investors will need to close out their positions and subsequently enter into the next contract expiry. This is usually done automatically on the investors behalf by the broker

Example - investors holding a June contract will need to roll their position into the September contract. If an investor had bought a June contract, the investor would have to sell the June contract and subsequently buy a September contract The benefit to the investor is that the same exposure is maintained.

The Exchange offers discounted trade fees for all positions that are rolled over

World’s daily turnover is app. US $ 4.5 trillion

India’s daily turnover is app. US $25 bn or Rs. 1.5 Lk crore

Currency Future accounts for a meager Rs 2000cr.

Currency USD INR
Aus Dollar 0.75 48.29
Brazil Real 0.32 20.52
Chinese Yuan 0.14 9.34
Cnd Dollar 0.75 48.13
Euro 1.06 68.33
Hongkong Dollar 0.13 8.31
Japan Yen 0.01 0.58
Russian Rouble 0.02 1.12
Saudi Arabian Riyal 0.27 17.21
Singapore Dollar 0.71 45.87
South African Rand 0.07 4.65
Swedish Krona 0.11 7.11
Swiss Franc 0.99 63.95
Thailand Bhat 0.03 1.86
UAE Dirham 0.27 17.57
UK Pound 1.24 79.99
US Dollar 1.00 64.54
Last Update : 10 Apr 2017 13:03:19
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