CURRENCY FUTURES
Futures Contract
• As per the latest BIS report, the OTC market accounts for
more than $3 trillion of currency trading every day; this
compares with the notional principal of $72 billion traded on
exchanges.
Currency futures in India
• Currency futures trading was started in Mumbai August 29,
2008.
• With over 300 trading members including 11 banks
registered in this segment, the first day saw a very lively
counter, with nearly 70,000 contracts being traded.
• The first trade on the NSE was by East India Securities Ltd.
• Amongst the banks, HDFC Bank carried out the first trade.
The largest trade was by Standard Chartered Bank
constituting 15,000 contracts. Banks contributed 40 percent of
the total gross volume.
• Traded in BSE, NSE and MCX exchanges
Features of Currency Futures
• Only USD-INR contracts are allowed to be traded.
• Buy/Sell the currency for the desired future period using the
trading platform given by the exchange or through broker
Membership Type
• Trading Member (TM): A member with rights to trade on its
own account as well as on account of its clients, but has no
right to clear and settle such trades itself.
Cash to NSEIL 10 L
Stock Exchange MCX NSE BSE MCX NSE BSE MCX NSE BSE
Cash to NSEIL 15 L 15 L 20 L
• Price limits:
Tenure up to 6 months: +/- 3% of base price
9 months:+/- 5% of base price
Costs involved in currency futures trade
• Margin
• Brokerage
• Exchange transaction charges
• Stamp duty
• STT
• Service tax
• Education tax on brokerage fees
Forward Contract