How to Open Your FREE DEMAT Account
Currency Derivatives
Currency derivatives can be described as contracts between the sellers and buyers, whose values are to be derived from the underlying assets i.e. the currency amount. World’s largest market – Driven by fundamentals. The Currency trading market attracts about $5.2 trillion in daily volume, recognized as the world’s largest market, accessible globally 24 hours a day – that is exactly what the Currency market is made up of! The advantage of small margin requirements and lower entry barriers makes it an important part of a retail investor’s portfolio. The best part about currency tradingis that you don’t need to open a new account or have different funds for this asset class. You can use the margin money and collaterals across Equity, F&O & Currencies on the same platform. No separate investment is required for Currency Trading. Currency futures and currency options are also very efficient risk management instruments offering benefits such as:
Hedges risk
- Acts as insurance against unforeseen and unpredictable currency and interest rate movements.
- If receivables or payments to be incurred are in multiple currencies,
- If receivables or payments to be incurred are in multiple currencies,
Benefits to Small & Medium Enterprise(s):
SMEs do not receive support from banks readily due to higher counter party risk, lesser solvency and ability to honour its obligations. They may have to pay higher commissions making the transaction cost higher and the reducing the profit margins. Exchange traded currency derivatives will help these firms to hedge their risk with lower transaction costs. Opening up of trading in currency derivatives will give relief to small traders and SMEs.
SMIFS Limited, against the back drop of dealing in foreign affairs and clients, has developed over the years expertise in guiding corporates against their currency exposure risk.
Contract Specification & Features:
Underlying : Rate of exchange between 1 USD & INR
Pair : USD/INR, EUR/INR, GBP/INR, JPY/INR
Contract Months : The maturity of the contracts shall not exceed 12 months
Expiration date and time / Last trading day & time : At 12:30 noon, two working days prior to the last Mumbai Interbank Settlement day of the month
Min Price fluctuation / Tick size : 0.25 Paise or INR 0.0025
Settlement Daily Interim MTM settlement Final settlement: The contracts shall be quoted and settled in Indian Rupees based on daily closing price of the contract and settlement price shall be the Reserve Bank’s Reference Rate on the last trading day .
Margin required for 1 lot USD/INR : 1.75% on the first day & 1% thereafter
Market timings: 9:00 AM to 5:00 PM
