A Trader's Paradise

With a commendable Global trading volume of about more than $ 5 trillion daily, Currency trading is rightly recognized as the largest market globally, accessible 24 hours a day. Advantage of small margin requirements and lower entry barriers makes it an important part of a retail investor’s portfolio.

For a long time there was no recognized market for trading in currencies or in currency futures. Forex trading in India was restricted to the rupee forward market (OTC) that was largely an inter-bank market. Currency trading in India picked among small and medium sized investors after the introduction of currency futures on the Exchanges like NSE Commenced in August 2008.

The major traded currency pairs through Futures as well as Options contract on the NSE Exchange platform are as follows:

Currency Pairs Available Monthly Contracts Contract Lot Size Price Quotation
(In Rs)
Market Timing
(Mon. to Fri)
USDINR 12 Months USD 1000 1 USD 09.00 am to 5.00 pm
EURINR 12 Months EUR 1000 1 EUR 09.00 am to 5.00 pm
GBPINR 12 Months GBP 1000 1 GBP 09.00 am to 5.00 pm
JPYINR 12 Months JPY 100000 100 JPY 09.00 am to 5.00 pm

Why participate in Currency Derivatives Markets?

1. Trading Opportunities

For an F&O trader, volatility in currencies offer a great opportunity to capture tick by tick price movements or by taking positions based on short term view keeping in mind the fundamentals that influence the price parity between different currencies. Currency trading is an ideal way to diversify ones F&O portfolio as it is affected by factors different from those that influence Equities and Commodities.

2. Hedging and Risk Management through Currency Derivatives.

Like most other financial tools, currency prices are highly volatile as it is affected by various economic & political factors. But the most important ones are interest rates, international trades, inflation & political stability. Government through central bank intervention can participate in foreign exchange market to influence the value of their currencies. In order to create impact, they either flood the market with their domestic currency to lower the price or buy to raise the price. Currency Futures is most suitable platform for Importers, Exporters, and & manufacturer for their hedging needs in currency exposures. More ever speculators are the most active players due to the fascinating volume, volatility and varied global factors which influence the currency fluctuations.

Some Advantages for Hedgers for trading on Exchange platform vs traditional Bank forward contracts .

Basis of Comparison Forward Contract with Banks Futures Contracts on Exchange
Participants Contracts are mostly between a Bank
(Authorized Dealer) and the Client
(Importers, Exporters, Borrowers of Foreign
Currency Loans and Indian Overseas Investors)
FPI, Banks, Corporates (Importers & Exporters)
and Individuals
Liquidity Subject to Credit Limits Margins Equate All Participants
Accessibility Low – One has to personally visit
the bank branch / Business hours.
High – Prices can be reached to any
corner of the world through Internet access.
Credit Exposure Exposure to your Counterparty (Bank) Clearing Corporation Guarantees all Trades
Transparency Low High
Contract Specifications Customized: Client – to - client Standardized by exchange
Margins / MTM NIL – No MTM Initial margin required.
Participation To all – as per bank norms. Only Resident Indians & FPI
Flexibility Low High
Beneficiaries Large Corporates Benefits even for Small Players due to smaller contracts.
Contract size Big Small
Delivery of currencies Takes place Only Cash Settlement in INR
Enquire Now
To Know More
Give a Missed call on – 08045936028

+91-22-40934038 / 71 / 73
Mon to Fri - 10.00 a.m. to 6.00 p.m. (except public holidays)