Currency futures trading in India

by Muskaan Delvi Muskaan Delvi For many people currency futures trading is something that only huge companies, businesses and banks deal in but that’s not entirely true. It has had the impression of a very complicated procedure and hence many people prefer staying out of this type of trading. Currency Future trading can help small traders as well.
However, it is one of the easiest money making trade facilities that people should be rooting for. Sure it has its own share of risks but it does just as much benefits. For the longest time people have believed that the Indian financial market has lacked something and hence it never seems completely mature and well-functioning. Many financial pros say that the currency futures trading in India can be the missing piece of the market in India and it can make Indian markets one of the top most influential very soon.
Dealing in currency future trade leads to creating a rift between the currencies. It changes the currency exchange rate in effective ways. However, there is no way of knowing if the prices will go up or go down when it comes to currency exchange.

Foreign exchange trading or forex trading in India is not an option and it is considered illegal.  RBI doesn’t allow online forex trading in India but what is does allow is trading in different currency derivatives.  This is slightly different than the former. RBI allows dealing in currency futures trading provided it is done through these three exchanges – National Stock Exchange (NSE), MCX-SX, and the United Stock Exchange (USE). The currency option available is as US Dollar per Indian Rupee (USD-INR) spot rate.
RBI has allowed three more currencies to deal with in the Indian markets USD, Euro and Japanese Yen i.e. American Dollars, European Euros and Japan’s Yen.
 
Only once the customers complete their KYC guidelines, submit their documents and follow the RBI and SEBI rules, they can deal in foreign currency derivatives. They are required to open a trading account for a trade in forex derivatives. For this, documents like PAN card, Passport, Cancelled Cheque along with account details are absolutely necessary.
Currency futures trading in India can be easily done with the help of a broker provided the customers are also updated with everything that is going on. With the right information and a little help, this trading in India can be easily done.
Hedging and Arbitrage are the two most important benefits that anyone can derive from the currency trading. Anyone can make profits by checking the exchange rates and dealing accordingly.

Currency future trading is the best for the companies whose business gets affected hugely on the basis of currency exchange ratios. For instance the import and export business get largely affected as they incur foreign exchange. But, apart from these, anyone who has an interest in futures trading can participate into this. The only criteria is the he/she should be a resident Indian. This facility is not yet available to the NRIs.

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Created on Dec 31st 1969 18:00. Viewed 0 times.

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