Rohit Thakur Ppt On CurrencyPresentation Transcript
Rohit thakur MMS
Trading in currency future
What is currency futures
A transferable futures contract that specifies the price at which a specified currency can be bought or sold at a future date. Currency future contracts allow investors to hedge against foreign exchange risk.
History of Currency futures
Currency futures were first created at the Chicago Mercantile Exchange (CME) in 1972
International Monetary Market (IMM) launched trading in seven currency futures on May 16 , 1972 .
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.
Fundamentals of Indian currency futures
Currency futures can be traded between Indian rupees and US dollar (US$ -- INR)
The trading of Indian currency futures can be done between 9 am to 5 pm
The minimum size of currency futures is US$ 1000 periodically the value of the contract can be changed by RBI and SEBI
The currency future can have maximum validity of 12 months
The currency futures contract can be settled in cash
Trade exchanges for currency futures
There are 3 trade exchange that trades in currency futures
National Stock Exchange (NSE)
Bombay Stock Exchange (BSE)
Multi-Commodity Exchange (MCX)
Importance of currency futures
According to market analysts, introduction of currency futures in the Indian market will give companies greater flexibility in hedging their underlying currency exposure and will bring in more liquidity into the market as currency future or forex derivative contract will enable a person, a bank or an institution to buy or sell a particular currency against the other on a specified future date, and at a price specified in the contract.