This document provides information about currency futures trading on the MCX Stock Exchange (MCX-SX) in India. It discusses what currency futures are and how they can be used to hedge against currency risk. It also outlines the key participants in the currency futures market, including hedgers, investors, and arbitrageurs. Finally, it provides product specifications and frequently asked questions about the USDINR, EURINR, GBPINR, and JPYINR currency futures contracts available on MCX-SX.
Financial derivatives have grown enormously over the past decade as a way to differentiate and allocate risk. Derivatives are financial contracts whose value is dependent on an underlying asset such as a stock, bond, commodity, currency, interest rate or index. There are several types of derivatives including forwards, futures, options, and swaps. Derivatives allow risk to be traded in financial markets and help companies and investors to hedge against risk.
The document discusses foreign exchange management. It provides details about the foreign exchange market, including that it is a worldwide network of banks, brokers, corporations and central banks that buy and sell currencies. The market functions 24 hours a day. It also discusses the major participants in the market like commercial banks, customers, central banks, and speculators. Furthermore, it explains different types of transactions in the various markets like spot, forward and cash transactions. It also covers exchange rate systems used by different countries like the gold standard and floating exchange rates.
This document provides an overview of currency derivatives and futures markets. It begins with an introduction to currency derivatives and how exchange rates work in international business transactions. It then outlines the objectives and research methodology of the report, which will analyze currency futures markets through secondary sources. The document defines financial derivatives and outlines the different types, including forwards, futures, options, and swaps. It provides background on the introduction of derivatives trading in India and the regulatory framework. The report will analyze currency futures pricing models and how they can be used for hedging.
A Study on Impact in Exchange Rate of Indian Rupee versus US Dollar with Spec...IJAEMSJORNAL
Foreign Exchange Rate is the largest financial market function is converting any foreign currency into another currency. A market based exchange rate will change whenever the values of either of the two component currencies change. A currency will tend to become more valuable whenever demand for it is greater than the available supply. Increased demand for a currency is due to either an increased transaction demand for money, or increased speculative demand for money. The transaction demand for money is highly correlated to the countries level of business activity, Gross Domestic Product (GDP), and employment levels. Most of the peoples are unemployed, the less the public as a whole will spend on goods and services. Central banks typically have little difficulty in adjusting the available money supply to accommodate changes in the demand for money due to business transactions. Such fluctuations in exchange rate have its impact on the economic growth of the economy. Hence the present study aims at finding out the Impact in the exchange rate and stock market.
This document discusses currency futures trading in India. It provides background on currency futures markets globally and how they were introduced in India in 2008. Currency futures allow investors to hedge foreign exchange risk in a transparent and efficient manner. Trading has grown substantially since introduction, with the National Stock Exchange seeing a 1200% increase in daily trading volumes from September 2008 to June 2009. Currency futures provide benefits to both retail and institutional investors in India.
A study on functioning of foreign exchange marketVivek Mahajan
This document is a project report submitted by a student named Vivek Shriram Mahajan to the University of Mumbai in partial fulfillment of an M.Com degree. The report studies the functioning of foreign exchange markets. It contains chapters on the types of exchange rates (fixed and floating), the functions of foreign exchange markets, and foreign exchange markets in India. The student declares that the work is original and acknowledges the support received from teachers, family, and others in completing the project report.
This document is a project report on derivatives markets submitted by Jasmeet Singh Nagpal, a student of Guru Nanak Khalsa College, to the University of Mumbai in partial fulfillment of a Bachelor of Commerce degree. It includes an introduction to derivatives, their origin and economic functions. It also covers various chapters on futures, forwards, and options contracts - defining each type of derivative, how they work, and their purpose in trading markets. The report is certified by the student's project guide and college administrators.
This document provides an overview of a study on foreign exchange market practices in India. It includes an introduction to foreign exchange, objectives of the study, research methodology, analysis and findings. The study analyzes relationships between major currencies (US dollar, euro, pound) and Indian stock indices (Nifty, Sensex). It finds no significant relationship between dollar and euro exchange rates, but finds relationships between euro and pound rates and between currency exchange rates and stock market performance. The conclusion is that the dollar price fluctuates more than euro and pound against the rupee, and currency depreciation can attract foreign investment.
Financial derivatives have grown enormously over the past decade as a way to differentiate and allocate risk. Derivatives are financial contracts whose value is dependent on an underlying asset such as a stock, bond, commodity, currency, interest rate or index. There are several types of derivatives including forwards, futures, options, and swaps. Derivatives allow risk to be traded in financial markets and help companies and investors to hedge against risk.
The document discusses foreign exchange management. It provides details about the foreign exchange market, including that it is a worldwide network of banks, brokers, corporations and central banks that buy and sell currencies. The market functions 24 hours a day. It also discusses the major participants in the market like commercial banks, customers, central banks, and speculators. Furthermore, it explains different types of transactions in the various markets like spot, forward and cash transactions. It also covers exchange rate systems used by different countries like the gold standard and floating exchange rates.
This document provides an overview of currency derivatives and futures markets. It begins with an introduction to currency derivatives and how exchange rates work in international business transactions. It then outlines the objectives and research methodology of the report, which will analyze currency futures markets through secondary sources. The document defines financial derivatives and outlines the different types, including forwards, futures, options, and swaps. It provides background on the introduction of derivatives trading in India and the regulatory framework. The report will analyze currency futures pricing models and how they can be used for hedging.
A Study on Impact in Exchange Rate of Indian Rupee versus US Dollar with Spec...IJAEMSJORNAL
Foreign Exchange Rate is the largest financial market function is converting any foreign currency into another currency. A market based exchange rate will change whenever the values of either of the two component currencies change. A currency will tend to become more valuable whenever demand for it is greater than the available supply. Increased demand for a currency is due to either an increased transaction demand for money, or increased speculative demand for money. The transaction demand for money is highly correlated to the countries level of business activity, Gross Domestic Product (GDP), and employment levels. Most of the peoples are unemployed, the less the public as a whole will spend on goods and services. Central banks typically have little difficulty in adjusting the available money supply to accommodate changes in the demand for money due to business transactions. Such fluctuations in exchange rate have its impact on the economic growth of the economy. Hence the present study aims at finding out the Impact in the exchange rate and stock market.
This document discusses currency futures trading in India. It provides background on currency futures markets globally and how they were introduced in India in 2008. Currency futures allow investors to hedge foreign exchange risk in a transparent and efficient manner. Trading has grown substantially since introduction, with the National Stock Exchange seeing a 1200% increase in daily trading volumes from September 2008 to June 2009. Currency futures provide benefits to both retail and institutional investors in India.
A study on functioning of foreign exchange marketVivek Mahajan
This document is a project report submitted by a student named Vivek Shriram Mahajan to the University of Mumbai in partial fulfillment of an M.Com degree. The report studies the functioning of foreign exchange markets. It contains chapters on the types of exchange rates (fixed and floating), the functions of foreign exchange markets, and foreign exchange markets in India. The student declares that the work is original and acknowledges the support received from teachers, family, and others in completing the project report.
This document is a project report on derivatives markets submitted by Jasmeet Singh Nagpal, a student of Guru Nanak Khalsa College, to the University of Mumbai in partial fulfillment of a Bachelor of Commerce degree. It includes an introduction to derivatives, their origin and economic functions. It also covers various chapters on futures, forwards, and options contracts - defining each type of derivative, how they work, and their purpose in trading markets. The report is certified by the student's project guide and college administrators.
This document provides an overview of a study on foreign exchange market practices in India. It includes an introduction to foreign exchange, objectives of the study, research methodology, analysis and findings. The study analyzes relationships between major currencies (US dollar, euro, pound) and Indian stock indices (Nifty, Sensex). It finds no significant relationship between dollar and euro exchange rates, but finds relationships between euro and pound rates and between currency exchange rates and stock market performance. The conclusion is that the dollar price fluctuates more than euro and pound against the rupee, and currency depreciation can attract foreign investment.
This project report summarizes a study on the currency futures market in India conducted by two MBA students, Milan Adodariya and Khima Goraniya, at Anagram Capital as part of their summer training. The report includes an introduction, literature review, research methodology, data collection and analysis sections. It also provides an overview of the foreign exchange market, history of currency futures in India, company and industry profiles, findings from surveys conducted, and conclusions.
11.measuring the volatility of foreign exchange market in indiaAlexander Decker
This document summarizes a research study measuring the volatility of foreign exchange rates in the Indian market. The study analyzes daily exchange rate data for the US dollar, euro, and Japanese yen against the Indian rupee over time. The objectives are to measure the volatility of these currencies, examine their co-movement, analyze the volatility distribution, and measure skewness and kurtosis. Hypotheses test whether the volatility is normally distributed. The results could help manage foreign exchange risk more effectively in India's increasingly globalized economy.
Challenges and Prospects of Derivative Market in NepalKarna Lama
The document provides an introduction and background on derivatives markets in Nepal. It discusses how derivatives first originated in Japan in the 1650s and were introduced in Nepal in 2006. It notes that Nepal's derivatives market is still developing and limited mostly to commodity derivatives. The objectives of the study are to analyze the growth patterns, problems, and future prospects of derivatives in Nepal. It identifies several research questions around the challenges facing the Nepalese derivatives market and its potential contributions to the economy. The study aims to provide an overview of the Nepalese derivatives market and examine regulations, policies, and concepts of derivatives trading in Nepal. It acknowledges limitations due to the market being recently established and lack of information.
Foreign exchange markets allow for the trading of one country's currency for another. This facilitates international trade and investment. The global foreign exchange market consists of major international banks trading various currencies. The major currencies traded are the US dollar, euro, yen, and pound. Arbitrage opportunities can exist when temporary price discrepancies allow traders to profit from buying low and selling high across different currency exchanges.
Unit 2.1 Foreign Currency, Foreign Transactions- trade and non trade, and Rol...Charu Rastogi
The document discusses foreign currency, foreign exchange transactions, and participants in the foreign exchange market. It defines foreign currency and foreign exchange according to Indian law. It describes trade transactions as imports and exports, and non-trade transactions as other cross-border monetary movements like investments and loans. The foreign exchange market connects various participants globally, including banks, companies, central banks, hedge funds, investment firms, retail brokers, non-bank exchange companies, and money transfer companies. Each participant plays a distinct role in the market.
Foreign exchange market and it's structure in indiaStudsPlanet.com
The document discusses the structure and features of the foreign exchange market. It begins by defining foreign exchange and describing the major participants in the exchange market, including commercial banks, money changers, and the Foreign Exchange Dealers Association of India (FEDAI). It then outlines the roles and regulations of various authorized entities that can participate in the market, such as authorized dealers and restricted authorized dealers. Finally, it discusses key characteristics of the foreign exchange market, including that it is a 24-hour global market connected by communication channels with a daily turnover of $2.75-3 trillion.
The document provides an overview of the foreign exchange market and the Reserve Bank of India's (RBI) role in managing it. It discusses the basic concepts and participants in the FX market. It describes the historical evolution from a fixed exchange rate regime to a more liberalized and market-based system. It also outlines the RBI's tools for intervening in the interbank market to influence exchange rates and maintain stability, including through moral suasion, relaxing exposure limits, and direct buying and selling of currencies.
Study of volatility_and_its_factors_on_indian_stock_marketKarthik Juturu
The document discusses factors that contribute to volatility in the Indian stock market. It identifies several macroeconomic variables like geopolitical tensions, energy prices, inflation, interest rates, and government/RBI policies that create uncertainty and affect company valuations. It also notes that volatility has increased in recent years due to factors like increased financial leverage of companies. The main objective is to analyze the causes of stock market volatility in India and understand how the market reacts to different influences.
This document is a final project report submitted by Akash Sudhir Salve to the Yadavrao Tasgaonkar Institute of Management Studies and Research. The project examines India's foreign exchange reserves from 2007 to 2012. It includes sections on the objectives of the study, history and structure of foreign exchange markets, types of foreign exchange risk and hedging, methodology, analysis of data, findings, and the impact of foreign exchange on the Indian economy and business. The report also contains a case study, lessons on avoiding forex trading mistakes, and conclusions.
Commodity markets allow for the trading of raw materials and agricultural products. Commodities can be classified into categories like precious metals, agricultural products, energy, and petrochemicals. While some commodities like gold and oil are traded on exchanges, others like fresh flowers and eggs currently have no formal markets. Commodity markets provide an alternative asset class that is not correlated to stocks and bonds. Trading occurs through physical spot markets, forward contracts between private parties, and standardized futures contracts on regulated exchanges. Key participants include hedgers who manage risk and speculators who seek profits. Regulators oversee commodity markets to ensure transparency, fairness, and financial stability.
This document provides an overview of foreign exchange markets, including key participants, factors that influence exchange rates, and types of exchange rates. It discusses major world currencies, direct and indirect exchange rate methods, and spot and forward delivery. Key entities that govern the foreign exchange market in India are also outlined, such as the Reserve Bank of India and Foreign Exchange Dealers Association of India. The 24-hour global nature of the foreign exchange market and its lack of a physical location are highlighted.
100830724 project-on-commodity-market-vishnu-mantriRushabh Shah
The document provides an overview of commodity markets, including:
1. It defines key terms like commodity, commodity exchange, and commodity futures. Commodities are standardized goods or products that are traded, while a commodity exchange facilitates futures trading in licensed commodities.
2. It outlines the history and evolution of commodity markets, tracing their origins to organized trading of rice tickets in Japan in the 1800s and futures trading of wheat in Chicago in 1848.
3. It discusses the development of commodity markets in India, including futures trading of cotton starting in 1875, as well as the banning of some derivatives after independence in 1952.
The document summarizes the growth of currency futures in India. It analyzes data on open interest and contracts traded on exchanges like NSE and MCX-SX from 2008 to 2014. Open interest and number of contracts traded generally increased over this period, indicating growth in the currency futures market. However, the market saw fluctuations and downward trends in 2013-14, possibly due to rupee devaluation. The conclusions state that the Indian currency futures market has seen many changes and consistent growth since 2012-13, but the potential of the market is yet to be realized.
The document discusses a report submitted by Yogesh Moule on the fundamentals of derivatives with a focus on currency derivatives. It includes declarations signed by Yogesh and his mentor certifying the project's authenticity and that it fulfills requirements for Yogesh's PGDM program at Indus Business Academy. The report also provides information on Religare Securities Limited where Yogesh completed his summer internship project.
The foreign exchange market is a global decentralized market for trading currencies. It includes the spot market, where currencies are bought and sold for immediate delivery, the forward market, where contracts guarantee future delivery of a currency, and the futures market, where standardized contracts are traded. In the wholesale interbank market, large banks trade currencies with each other. Individuals and smaller businesses engage in the retail forex market through online brokers. The forex market facilitates international trade and commerce by enabling currency exchange and conversion.
The document provides an overview of the derivatives market in India. It discusses key concepts like forwards, futures, options, and swaps. It outlines the evolution of the derivatives market in India, from the first steps taken in 1995 to remove prohibitions on options trading, to the establishment of a regulatory framework by SEBI and the launch of index futures and options trading on exchanges like NSE and BSE in 2000. The needs served by derivatives markets are also summarized, such as risk transfer, price discovery, and increasing market volumes. Common participants like hedgers, speculators, arbitrageurs and spreaders are defined. Examples of popular derivatives products available on Indian exchanges are also provided.
Commodity market in nepal, By Somnath kandelsomnath_kandel
The document discusses commodity derivatives markets in Nepal. It provides an overview of commodity exchanges globally and in Nepal, outlining some of the proposed structures. It describes the importance and advantages of commodity markets, including risk minimization and fair price discovery. Some of the risks of the market are also outlined. Factors that affect trading decisions, both fundamental and technical, are explored. The conclusion notes that the Nepalese commodity derivatives market is still developing.
This document provides an overview of foreign exchange and the forex market in India. It defines forex as foreign currency and discusses how the forex market works globally and within India. The key points are:
- Forex refers to foreign currencies that are traded and exchanged on global markets.
- India's forex market originated in 1978 and expanded significantly in the 1990s, operating continuously around the clock.
- Within India, the Reserve Bank regulates authorized forex dealers like banks and money changers. The Foreign Exchange Dealers Association of India also oversees trading practices.
- The global forex market is highly liquid, connected electronically, and experiences volatile price fluctuations due to floating exchange rates between
This document provides an introduction to commodity markets, including definitions of key terms like "commodity" and "commodity futures." It discusses the history and evolution of commodity markets, which began with trading of "rice tickets" in Japan and later developed into organized futures trading in Chicago in 1848. The document outlines the objectives and benefits of commodity futures markets, such as price discovery, price risk management, import/export competitiveness, and improved access to credit. Overall, it serves as a high-level overview of what commodity markets are and how they function.
The document discusses currency futures and the foreign exchange market. It provides details on:
1) The foreign exchange market is the largest financial market in the world, with an average daily trading volume of over $3.5 trillion.
2) The US dollar is the most widely traded currency due to its role as an investment, reserve, transaction, and invoice currency in global markets.
3) Currency futures provide a transparent and accessible way for individuals and businesses to hedge currency risk and speculate on exchange rate movements through an exchange-traded market.
CIBIL is India's first Credit Information Bureau established in 2000 as a repository of credit information on commercial and consumer borrowers. It collects data from its member institutions including banks, NBFCs, and other lenders to create credit reports on borrowers. These reports provide members with insights into applicants' credit histories and repayment records to facilitate more informed lending decisions. CIBIL's products and services help both lenders to better assess risk and price loans, and borrowers to demonstrate responsible credit behavior and more easily access financing.
This project report summarizes a study on the currency futures market in India conducted by two MBA students, Milan Adodariya and Khima Goraniya, at Anagram Capital as part of their summer training. The report includes an introduction, literature review, research methodology, data collection and analysis sections. It also provides an overview of the foreign exchange market, history of currency futures in India, company and industry profiles, findings from surveys conducted, and conclusions.
11.measuring the volatility of foreign exchange market in indiaAlexander Decker
This document summarizes a research study measuring the volatility of foreign exchange rates in the Indian market. The study analyzes daily exchange rate data for the US dollar, euro, and Japanese yen against the Indian rupee over time. The objectives are to measure the volatility of these currencies, examine their co-movement, analyze the volatility distribution, and measure skewness and kurtosis. Hypotheses test whether the volatility is normally distributed. The results could help manage foreign exchange risk more effectively in India's increasingly globalized economy.
Challenges and Prospects of Derivative Market in NepalKarna Lama
The document provides an introduction and background on derivatives markets in Nepal. It discusses how derivatives first originated in Japan in the 1650s and were introduced in Nepal in 2006. It notes that Nepal's derivatives market is still developing and limited mostly to commodity derivatives. The objectives of the study are to analyze the growth patterns, problems, and future prospects of derivatives in Nepal. It identifies several research questions around the challenges facing the Nepalese derivatives market and its potential contributions to the economy. The study aims to provide an overview of the Nepalese derivatives market and examine regulations, policies, and concepts of derivatives trading in Nepal. It acknowledges limitations due to the market being recently established and lack of information.
Foreign exchange markets allow for the trading of one country's currency for another. This facilitates international trade and investment. The global foreign exchange market consists of major international banks trading various currencies. The major currencies traded are the US dollar, euro, yen, and pound. Arbitrage opportunities can exist when temporary price discrepancies allow traders to profit from buying low and selling high across different currency exchanges.
Unit 2.1 Foreign Currency, Foreign Transactions- trade and non trade, and Rol...Charu Rastogi
The document discusses foreign currency, foreign exchange transactions, and participants in the foreign exchange market. It defines foreign currency and foreign exchange according to Indian law. It describes trade transactions as imports and exports, and non-trade transactions as other cross-border monetary movements like investments and loans. The foreign exchange market connects various participants globally, including banks, companies, central banks, hedge funds, investment firms, retail brokers, non-bank exchange companies, and money transfer companies. Each participant plays a distinct role in the market.
Foreign exchange market and it's structure in indiaStudsPlanet.com
The document discusses the structure and features of the foreign exchange market. It begins by defining foreign exchange and describing the major participants in the exchange market, including commercial banks, money changers, and the Foreign Exchange Dealers Association of India (FEDAI). It then outlines the roles and regulations of various authorized entities that can participate in the market, such as authorized dealers and restricted authorized dealers. Finally, it discusses key characteristics of the foreign exchange market, including that it is a 24-hour global market connected by communication channels with a daily turnover of $2.75-3 trillion.
The document provides an overview of the foreign exchange market and the Reserve Bank of India's (RBI) role in managing it. It discusses the basic concepts and participants in the FX market. It describes the historical evolution from a fixed exchange rate regime to a more liberalized and market-based system. It also outlines the RBI's tools for intervening in the interbank market to influence exchange rates and maintain stability, including through moral suasion, relaxing exposure limits, and direct buying and selling of currencies.
Study of volatility_and_its_factors_on_indian_stock_marketKarthik Juturu
The document discusses factors that contribute to volatility in the Indian stock market. It identifies several macroeconomic variables like geopolitical tensions, energy prices, inflation, interest rates, and government/RBI policies that create uncertainty and affect company valuations. It also notes that volatility has increased in recent years due to factors like increased financial leverage of companies. The main objective is to analyze the causes of stock market volatility in India and understand how the market reacts to different influences.
This document is a final project report submitted by Akash Sudhir Salve to the Yadavrao Tasgaonkar Institute of Management Studies and Research. The project examines India's foreign exchange reserves from 2007 to 2012. It includes sections on the objectives of the study, history and structure of foreign exchange markets, types of foreign exchange risk and hedging, methodology, analysis of data, findings, and the impact of foreign exchange on the Indian economy and business. The report also contains a case study, lessons on avoiding forex trading mistakes, and conclusions.
Commodity markets allow for the trading of raw materials and agricultural products. Commodities can be classified into categories like precious metals, agricultural products, energy, and petrochemicals. While some commodities like gold and oil are traded on exchanges, others like fresh flowers and eggs currently have no formal markets. Commodity markets provide an alternative asset class that is not correlated to stocks and bonds. Trading occurs through physical spot markets, forward contracts between private parties, and standardized futures contracts on regulated exchanges. Key participants include hedgers who manage risk and speculators who seek profits. Regulators oversee commodity markets to ensure transparency, fairness, and financial stability.
This document provides an overview of foreign exchange markets, including key participants, factors that influence exchange rates, and types of exchange rates. It discusses major world currencies, direct and indirect exchange rate methods, and spot and forward delivery. Key entities that govern the foreign exchange market in India are also outlined, such as the Reserve Bank of India and Foreign Exchange Dealers Association of India. The 24-hour global nature of the foreign exchange market and its lack of a physical location are highlighted.
100830724 project-on-commodity-market-vishnu-mantriRushabh Shah
The document provides an overview of commodity markets, including:
1. It defines key terms like commodity, commodity exchange, and commodity futures. Commodities are standardized goods or products that are traded, while a commodity exchange facilitates futures trading in licensed commodities.
2. It outlines the history and evolution of commodity markets, tracing their origins to organized trading of rice tickets in Japan in the 1800s and futures trading of wheat in Chicago in 1848.
3. It discusses the development of commodity markets in India, including futures trading of cotton starting in 1875, as well as the banning of some derivatives after independence in 1952.
The document summarizes the growth of currency futures in India. It analyzes data on open interest and contracts traded on exchanges like NSE and MCX-SX from 2008 to 2014. Open interest and number of contracts traded generally increased over this period, indicating growth in the currency futures market. However, the market saw fluctuations and downward trends in 2013-14, possibly due to rupee devaluation. The conclusions state that the Indian currency futures market has seen many changes and consistent growth since 2012-13, but the potential of the market is yet to be realized.
The document discusses a report submitted by Yogesh Moule on the fundamentals of derivatives with a focus on currency derivatives. It includes declarations signed by Yogesh and his mentor certifying the project's authenticity and that it fulfills requirements for Yogesh's PGDM program at Indus Business Academy. The report also provides information on Religare Securities Limited where Yogesh completed his summer internship project.
The foreign exchange market is a global decentralized market for trading currencies. It includes the spot market, where currencies are bought and sold for immediate delivery, the forward market, where contracts guarantee future delivery of a currency, and the futures market, where standardized contracts are traded. In the wholesale interbank market, large banks trade currencies with each other. Individuals and smaller businesses engage in the retail forex market through online brokers. The forex market facilitates international trade and commerce by enabling currency exchange and conversion.
The document provides an overview of the derivatives market in India. It discusses key concepts like forwards, futures, options, and swaps. It outlines the evolution of the derivatives market in India, from the first steps taken in 1995 to remove prohibitions on options trading, to the establishment of a regulatory framework by SEBI and the launch of index futures and options trading on exchanges like NSE and BSE in 2000. The needs served by derivatives markets are also summarized, such as risk transfer, price discovery, and increasing market volumes. Common participants like hedgers, speculators, arbitrageurs and spreaders are defined. Examples of popular derivatives products available on Indian exchanges are also provided.
Commodity market in nepal, By Somnath kandelsomnath_kandel
The document discusses commodity derivatives markets in Nepal. It provides an overview of commodity exchanges globally and in Nepal, outlining some of the proposed structures. It describes the importance and advantages of commodity markets, including risk minimization and fair price discovery. Some of the risks of the market are also outlined. Factors that affect trading decisions, both fundamental and technical, are explored. The conclusion notes that the Nepalese commodity derivatives market is still developing.
This document provides an overview of foreign exchange and the forex market in India. It defines forex as foreign currency and discusses how the forex market works globally and within India. The key points are:
- Forex refers to foreign currencies that are traded and exchanged on global markets.
- India's forex market originated in 1978 and expanded significantly in the 1990s, operating continuously around the clock.
- Within India, the Reserve Bank regulates authorized forex dealers like banks and money changers. The Foreign Exchange Dealers Association of India also oversees trading practices.
- The global forex market is highly liquid, connected electronically, and experiences volatile price fluctuations due to floating exchange rates between
This document provides an introduction to commodity markets, including definitions of key terms like "commodity" and "commodity futures." It discusses the history and evolution of commodity markets, which began with trading of "rice tickets" in Japan and later developed into organized futures trading in Chicago in 1848. The document outlines the objectives and benefits of commodity futures markets, such as price discovery, price risk management, import/export competitiveness, and improved access to credit. Overall, it serves as a high-level overview of what commodity markets are and how they function.
The document discusses currency futures and the foreign exchange market. It provides details on:
1) The foreign exchange market is the largest financial market in the world, with an average daily trading volume of over $3.5 trillion.
2) The US dollar is the most widely traded currency due to its role as an investment, reserve, transaction, and invoice currency in global markets.
3) Currency futures provide a transparent and accessible way for individuals and businesses to hedge currency risk and speculate on exchange rate movements through an exchange-traded market.
CIBIL is India's first Credit Information Bureau established in 2000 as a repository of credit information on commercial and consumer borrowers. It collects data from its member institutions including banks, NBFCs, and other lenders to create credit reports on borrowers. These reports provide members with insights into applicants' credit histories and repayment records to facilitate more informed lending decisions. CIBIL's products and services help both lenders to better assess risk and price loans, and borrowers to demonstrate responsible credit behavior and more easily access financing.
This document discusses different types of loans provided by banks. It begins by defining what a loan is and explaining the loan application and approval process. It then describes several common types of loans including overdrafts, cash credits, housing loans, personal loans, vehicle loans, education loans, agricultural loans, and credit cards. For each loan type, it provides details on eligible purposes and terms. It concludes by covering principles of sound lending and the role of CIBIL in evaluating loan applications.
Google acquired Android Inc. in 2005 and launched the Android mobile operating system in 2007 with the Open Handset Alliance, including companies like Qualcomm. Android uses the Linux kernel for core functions and relies on Java for application development. It has an open source model and uses components like SQLite for data storage, Dalvik virtual machine, and integrated browser. While popular for its openness and customization, Android faces security and compatibility challenges. Overall it has become very successful with the mobile market.
GST (Goods and Services Tax) is proposed as India's biggest tax reform. It will replace existing indirect taxes and provide a comprehensive indirect tax levy. GST is proposed as a dual GST with the center and states concurrently levying it. There are many advantages like removing cascading of taxes and creating a unified market. However, its complex design involving both center and states coordinating poses administrative challenges. Overall, GST has the potential to simplify taxation and boost growth if its implementation addresses all stakeholders' concerns.
This document provides an overview of the Android operating system, including its history, architecture, versions, features, advantages, and disadvantages. Android was founded in 2003 and was later acquired by Google in 2005. It uses an open source Linux kernel and is developed by the Open Handset Alliance. The architecture consists of four layers - the Linux kernel, native libraries, the Android runtime (Dalvik virtual machine), and applications. Key features include multi-tasking, a rich application ecosystem, and integration with Google services. Advantages are customization and openness, while disadvantages include inconsistent designs between apps and battery drain issues on some devices.
With the availability of abundant off-shore investment opportunities, investors may get
tempted to diversify their investments. However, Financial Planners may help them in
hedging the exchange risks through the effective use of Currency Futures.
Introduction of foreign exchange market, characteristics,AbhishekSharma2611
This document provides an introduction to foreign exchange markets, including definitions, characteristics, functions, structure, and major participants. It defines foreign exchange markets as markets for buying and selling foreign currencies. It lists key characteristics like being a 24-hour global market with high liquidity and transparency. The major functions are facilitating international trade and payments through currency exchange and providing credit and hedging against currency risk. Participants include commercial banks, brokers, central banks, speculators, hedgers, and individual traders. The market has no central location and occurs over-the-counter between banks and other participants.
NSE stands for National stock exchange and BSE stands for Bombay stock exchange. Mainly two exchanges in India regulated under SEBI(Security Exchange Board of India)
This document provides an overview of the Indian financial system, including its key constituents and components. It discusses the importance of financial regulation in maintaining stability and integrity. The main objectives of financial regulatory bodies in India are financial stability, consumer protection, maintaining market confidence, and reducing financial crime. The financial system consists of financial markets, intermediation, and instruments. Major components include money markets, capital markets, foreign exchange markets, and credit markets. Common financial instruments include treasury bills, certificates of deposit, commercial papers, and various equity and debt instruments.
A project on derivatives market in indiaProjects Kart
A project on derivatives market in India report goes beyond that the local derivative in the emerging markets have witnessed widespread use of the derivative instrument for a variety of reasons. This continuous growth and development by the emerging market participants has resulted in capital inflows as well as helped the investors in risk protection through hedging. Visit: http://www.projectskart.com/p/contact-us.html for more information.
The document provides an overview of derivatives transactions in India. It discusses the types of derivative markets including exchange traded and over-the-counter markets. It also describes the main types of traders in derivatives markets - hedgers who aim to reduce risk, speculators who take on risk to profit from price movements, and arbitrageurs who seek to profit from pricing discrepancies. Finally, it outlines the most common types of derivative contracts including forwards, futures, options, and swaps.
The document discusses the different types of financial markets including capital markets, commodity markets, money markets, derivatives markets, insurance markets, foreign exchange markets, and government securities markets. It provides details on the key segments within capital markets such as stock markets and bond markets. It also discusses the regulatory bodies that govern the different financial markets in India.
Final Report on Capital Market with all the components including derivatives, Classification of capital market, Trading Procedure, Legal frame work of capital market, Clearing and settlement procedures, Role of RBI &SEBI, Recommendations & Problem of capital market, Conclusion, etc.
The secondary market deals with the buying and selling of previously issued financial instruments such as stocks, bonds, and debt instruments. It is also known as the stock market. The secondary market maintains active trading, fixes prices through supply and demand, and ensures safe and fair dealings through regulations. It also disseminates company information and induces corporate performance.
This document discusses currency futures and risk management by a group including Smriti Jain, Ankit Shah, Nalini Gupta, Saptarshi Roy Chowdhury, and Shubham Dixit. It provides background on foreign exchange derivatives and volatility, and how hedging tools like currency futures can help minimize transaction exposure. It then discusses the launch of currency futures in India in 2008 and how they allow investors to buy or sell currencies at fixed prices on future dates. Finally, it covers risk management strategies in foreign exchange markets like initial margins, extreme loss margins, and different margin requirements based on currency.
The document discusses foreign exchange rates and the foreign exchange market. It provides definitions of key terms like exchange rate, spot rate, and forward rate. It describes the functions and key characteristics of the foreign exchange market, including that the daily global turnover is over $2 trillion and the US dollar is involved in 87% of transactions. It also outlines the different types of transactions that occur in the market and identifies the major participants, including banks, companies, speculators, central banks, and foreign exchange brokers.
The document discusses the introduction and development of derivatives trading in India, including currency derivatives. It provides an overview of currency futures, forwards, options, and swaps. It also discusses the foreign exchange market in India and currency derivative products. Key developments included the establishment of a committee in 1996 to develop regulations for derivatives trading, and the introduction of index futures and options in 2001.
The document provides an overview of the development of derivatives markets in India. It discusses how derivatives markets have existed in India for commodities since the late 1800s, but the markets were banned and informalized in the mid-1900s. Reforms in the 1990s and 2000s lifted bans and allowed the establishment of formal exchange-traded equity, foreign exchange, and interest rate derivatives markets. The National Stock Exchange now dominates trading in India, accounting for over 99% of volume. Regulations were also established to provide oversight while allowing derivatives to be used for hedging purposes.
The document provides an overview of financial instruments and financial markets. It defines a financial instrument as a real or virtual document representing a legal agreement involving monetary value. Financial instruments can be divided into cash instruments, whose values are directly influenced by markets, and derivative instruments, whose values are based on underlying assets. They can also be divided into debt-based instruments, representing loans, and equity-based instruments, representing ownership. The document then discusses the structure of financial markets in India, including various types of organized markets like the stock market, bond market, and money market, as well as unorganized informal markets. It describes the roles of various participants in these markets like stock exchanges, brokers, banks, and investment managers.
The derivatives market worth more than $516 trillion is experiencing a period of unwinding as worried investors pull out their cash. Several banks have reported major losses in the hundreds of millions to over a billion dollars from equity and currency derivatives. The unwinding or "Great Unwind" is a result of investors selecting higher risk investments in hopes of profiting from anticipated price movements but facing extraordinary losses when prices moved against them.
The document provides an overview of money markets, including characteristics, participants, purposes, risks, and securities. Money markets are used by participants to borrow and lend in the short term, from days to under a year. They facilitate the transfer of short-term funds between entities with excess and deficient funds. Key money market securities include treasury bills, commercial paper, certificates of deposit, and repurchase agreements.
This document provides an overview and comparison of the money markets in South Africa and India. It defines what money markets are and discusses the objectives, participants, instruments, and factors that influence money markets. Regarding South Africa specifically, it describes the institutions, instruments traded, trading systems, and regulation of the South African money market. For India, it notes the maturity periods, regulations, and types of instruments in the Indian money market. In comparing the two markets, it finds they have similar maturity periods, regulations, permitted instruments, and moved from paper-based to computerized trading.
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1. Currency Futures
Hedging against fluctuating currency rates
About MCX Stock Exchange
Currency futures market -
A perspective
Participants of a currency
futures market
FAQs
Product Specifications
2. About MCX Stock Exchange
MCX-SX, India's New Stock Exchange commenced operations in
October 7, 2008, under the regulatory framework of Securities &
Exchange Board of India (SEBI) and Reserve Bank of India (RBI).
Currently, MCX-SX offers an electronic platform for trading in
currency futures contracts. Clearing and settlement is conducted
through the MCX-SX Clearing Corporation Ltd. (MCX-SX CCL).
Within a year of its inception, MCX-SX has achieved stupendous
growth in average daily turnover and open interest. The average
daily turnover increased from Rs. 355.66 cr during the first month
of operations to Rs. 16,980 cr for the month of February 2010.
MCX-SX is now the leader in the currency derivatives segment.
MCX-SX witnesses participation from 498 cities and towns across
India and has a strong member base of 652. A whole array of
financial market participants including hedgers (i.e. exporters,
importers, corporates and Banks), investors and arbitrageurs use
the exchange platform.
True to its philosophy of ‘Systematic development of markets
through Information, Innovation, Education and Research’,
MCX-SX endeavours to ensure continuous innovation and to
introduce products for optimising the needs of diverse market
participants under the extant regulatory framework. The Exchange
is committed to expand its product offerings and provide trading
in other asset classes like equity, debt, interest rates, index and
exchange traded funds, subject to necessary regulatory
clearances.
Currency futures market -
A perspective
Globalization and integration of financial markets, coupled with
progressive increase of cross-border flow of capital, have
transformed the dynamics of Indian financial markets. This has
increased the need for dynamic currency risk management. The
steady rise in India’s foreign trade along with liberalization in
foreign exchange regime has led to large inflow of foreign
currency into the system in the form of FDI and FII investments.
In order to provide a liquid, transparent and vibrant market for
foreign exchange rate risk management, Securities & Exchange
Board of India (SEBI) and Reserve Bank of India (RBI) have allowed
trading in currency futures on stock exchanges for the first time in
India, initially based on the USDINR exchange rate and
subsequently on three other currency pairs – EURINR, GBPINR and
02
3. JPYINR. The USDINR futures contract is already being traded on
MCX-SX with more than US$ 2 billion average daily turnover. This
would give Indian businesses another tool for hedging their
foreign exchange risk effectively and efficiently at transparent
rates on an electronic trading platform. The primary purpose of
exchange-traded currency derivatives is to provide a mechanism
for price risk management and consequently provide price curve
of expected future prices to enable the industry to protect its
foreign currency exposure. The need for such instruments
increases with increase of foreign exchange volatility.
Participants of a
currency futures market
A host of benefits are available to a wide range of financial market
participants, including hedgers (exporters, importers, corporates
and Banks), investors and arbitrageurs on MCX-SX.
Hedgers: A high-liquidity platform for hedging against the
effects of unfavourable fluctuations in the foreign
exchange markets is available on exchange. Banks,
importers, exporters and corporate houses hedge on
MCX-SX.
Investors: All those interested in taking a view on appreciation
(or depreciation) of exchange rate in the long and
short term can participate in the MCX-SX currency
futures. For example, if one expects depreciation of
the Indian Rupee against the US dollar, then he can
hold on long (buy) position in USDINR contract for
returns. Contrarily, he can sell the contract if he sees
appreciation of the Indian Rupee.
Arbitrageurs: Arbitrageurs get the opportunity of trading in
currency futures by simultaneous purchase and sale
in two different markets, taking advantage of price
differential between the markets.
03
4. FAQs
What is currency trading?
While trade is international, currencies are national. As
international transactions are settled in global currencies,
usually they are brought/sold for one another and this
constitutes ‘currency trading’.
What are the factors that affect the exchange rate of a
currency?
A country’s currency exchange rate is typically affected by the
supply and demand for the country’s currency in the
international foreign exchange market. The demand and
supply dynamics is principally influenced by factors like
interest rates, inflation, trade balance and economic & political
scenarios in the country. The level of confidence in the
economy of a particular country also influences the currency
of that country.
How and why does the demand and supply of a currency
increase and decrease?
There are several reasons. A rise in export earnings of a
country increases foreign exchange supply. A rise in imports
increases demand. These are the objective reasons, but there
are many subjective reasons too. Some of the subjective
reasons are: directional viewpoints of market participants,
expectations of national economic performance, confidence in
a country’s economy and so on.
What is a currency futures contract?
A currency futures contract is a standardized version of a
forward contract that is traded on a regulated exchange. It is
an agreement to buy or sell a specified quantity of an
underlying currency on a specified date in future at a specified
rate (e.g., USD 1 = INR 46.00).
(Note: USD is abbreviation for the US Dollar, and INR for the
Indian Rupee).
What is the need of currency futures?
Currency futures are needed if your business is influenced by
fluctuations in currency exchange rates. If you are in India and
are importing something, you have done the costing of your
imports on the basis of a certain exchange rate between the
04
5. Indian Rupee and the relevant foreign currency. By the time you
actually import, the value of the Indian Rupee may have gone
down and you may lose out on your income in terms of Indian
Rupees by paying higher. On the contrary, if you are exporting
something and the value of the Indian Rupee has gone up, you
earn less in terms of Rupees than you had anticipated. Currency
futures help you hedge against these exchange rate risks.
Does the national economy of India need currency futures?
Every business exposed to foreign exchange risk needs to have
a facility to hedge against such risk. Exchange-traded currency
futures, as on MCX-SX, are a superior tool for such hedging
because of greater transparency, liquidity, counterparty
guarantee and accessibility. Since the economy is made up of
businesses of all sizes, anything that is good for business is also
good for the national economy.
Why exchange-traded futures? What’s wrong with the
currency forward market that has been existing in India for
a long time?
The exchange-traded futures, as compared to OTC forwards,
serve the same economic purpose, yet differ in fundamental
ways. Exchange-traded contracts are standardised. In an
exchange-traded scenario where the market lot is fixed at a
much lesser size than the OTC market, equitable opportunity is
provided to all classes of investors whether large or small to
participate in the futures market. The other advantages of an
Exchange traded market would be greater transparency,
efficiency and accessibility.
The counterparty risk (credit risk) in a futures contract is
eliminated by the presence of a clearing house/ corporation,
which by assuming counterparty guarantee, eliminates default
risk. Thus, introduction of exchange-traded futures help in
overall development of the forex market in the country.
Who can participate in a currency futures market?
Any resident Indian or company including Banks and financial
institutions can participate in the futures market. However, at
present, Foreign Institutional Investors (FIIs) and Non-Resident
Indians (NRIs) are not permitted to participate in currency
futures market.
What are the terms and conditions set by RBI for Banks to
participate in exchange traded fx futures?
RBI has allowed Banks to participate in currency futures market.
The AD Category I Banks which fulfill stipulated prudential
05
6. requirements are eligible to become a clearing member and / or
trading member of the currency derivatives segment of MCX-SX.
AD Category I Banks which are urban co-operative banks or
state co-operative banks can participate in the currency futures
market only as a client, subject to approval thereof, from the
respective regulatory department of RBI.
If I am an AD Category I Bank, why should I become a
member of a currency futures exchange? I have the
interbank market, anyway.
The interbank market is a market for Banks. Small and medium-
sized clients of Banks cannot directly participate in the
interbank market. If a Bank is a member of a currency futures
exchange, it can trade on behalf of its small and medium-sized
clients, who otherwise would not have been able to benefit
from fluctuations in currency exchange rates. Thus, Banks can
increase their customer base if they become a member of a
currency futures exchange. Banks themselves can also benefit
from a currency futures exchange by arbitraging between the
existing interbank market and the currency futures exchange.
Larger participation in a currency futures exchange gives the
exchange platform a greater vibrancy than the interbank
market, which is limited to Banks.
Can currency futures help small traders?
Yes. The minimum size of the USDINR futures contract is USD
1,000. Similarly EURINR future contract is EURO 1000, GBPINR
future contract is GBP 1000 and JPYINR future contract is YEN
1,00,000. These are well within the reach of most small traders.
All transactions on the Exchange are anonymous and are
executed on a price time priority ensuring that the best price is
available to all categories of market participants irrespective of
their size. As the profits or losses in the futures market are also
paid / collected on a daily basis, the scope of accumulation of
losses for participants gets limited.
If I am an individual with no exposure to foreign exchange
risks, does a currency futures exchange mean anything to me?
Yes, it does, if you want to invest purely as an investor. You can
benefit from exchange rate fluctuations just as you can benefit
by investing in equities in the stockmarket. However, as in the
stockmarkets, you also stand to lose money if the price
movements are not in keeping with what you had anticipated.
Participating in a currency futures exchange is risky, just as the
stockmarket is. You should therefore be knowledgeable about
the currency market if you want to participate as an investor.
06
7. How do exchange-traded currency futures enable hedging
against currency risk?
On a currency exchange platform, you can buy or sell currency
futures. If you are an importer, you can buy futures to “lock in” a
price for your purchase of actual foreign currency at a future
date. You thus avoid exchange rate risk that you would
otherwise have faced. On the other hand, if you are an exporter,
you sell currency futures on the exchange platform and “lock in”
a sale price at a future date. However, it may be noted that the
contract will be marked to market at the daily settlement price
and profit or loss will be paid / collected on a daily basis.
What are the risks involved in currency futures market?
Risks in currency futures pertain to movements in the currency
exchange rate. There is no rule of thumb to determine whether
a currency rate will rise or fall or remain unchanged. A
judgement on this will depend on the knowledge and
understanding of the variables that affect currency rates.
Which are the global exchanges that provide trading in
currency futures?
Internationally, exchanges such as Chicago Mercantile Exchange
(CME), Johannesburg Stock Exchange, Euronex t.liffe,
BM&FBOVESPA and Tokyo Financial Exchange provide trading in
currency futures.
Why should one trade in Indian exchanges as compared to
international exchanges?
Indian currency futures enable individuals and companies in
India to hedge and trade their Indian Rupee risk. Most
international exchanges offer contracts denominated in other
currencies.
What is the minimum trading unit (i.e. contract size) and
tenure of the USDINR, EURINR, GBPINR and JPYINR futures
contract?
The contract size of the USDINR futures contract is USD 1,000,
EURINR future contract is EURO 1,000, GBPINR future contract is
GBP 1,000 and JPYINR future contract is YEN 1,00,000. The
contracts shall have a maximum maturity of twelve months. All
monthly maturities from 1 to 12 months are available.
07
8. What is the last trading day of these currency futures
contract?
The last trading day of a futures contract on MCX-SX shall be
two working days prior to the last working day (excluding
Saturdays) of the month. The settlement price is the Reserve
Bank of India’s reference rate on the last trading day.
In which currency are the currency futures contracts settled?
They are settled in cash in Indian Rupees.
What are the various types of margins that are levied to
manage the risk?
The trading of currency futures is subject to maintenance of
initial, extreme loss, and calendar spread margins with the
clearing house / corporation. The details of the margins levied
are mentioned in the respective product specifications.
What are the currencies traded on MCX-SX?
In the first phase of operations, only the USDINR currency pair
was traded on MCX-SX. With the changing need of the
participants, the regulators have allowed MCX-SX to facilitate
trading in other major currency pairs as EURINR, GBPINR and
JPYINR future contracts.
What are the trading hours on MCX-SX?
Trading in currency futures is on all working days from Monday
to Friday and is between 9.00 am to 5.00 pm.
08
9. Product Specifications - EURINR
Symbol EURINR
Instrument Type FUTCUR
Unit of trading 1 (1 unit denotes 1000 EURO)
Underlying EURO
Quotation/Price Quote Rs. per EUR
Tick size 0.25 paise or INR 0.0025
Trading hours Monday to Friday - 9:00 a.m. to 5:00 p.m.
Contract trading cycle 12 month trading cycle.
Settlement price RBI Reference Rate on the date of expiry
Last trading day Two working days prior to the last business day of
the expiry month at 12 noon.
Final settlement day Last working day (excluding Saturdays) of the
expiry month. The last working day will be the
same as that for Interbank Settlements in
Mumbai.
Base price Theoretical price on the 1st day of the contract. On
all other days, DSP of the contract
Price operating range Tenure upto 6 months: +/-3 % of base price
Tenure greater than 6 months: +/- 5% of base price
Position limits
Clients Higher of 6% of total open interest or
EUR 5 million
Trading Members Higher of 15% of the total open interest or
EUR 25 million
Banks Higher of 15% of the total open interest
or EUR 50 million
Minimum initial margin 2.8% on First day & 2% thereafter
Extreme loss margin 0.3% of MTM value of gross open positions.
Calendar spreads Rs.700/- for a spread of 1 month, 1000/- for a
spread of 2 months, Rs.1500/- for a spread of
3 months or more
Settlement Daily settlement : T + 1
Final settlement : T + 2
Mode of settlement Cash settled in Indian Rupees
Daily settlement price DSP shall be calculated on the basis of the last
(DSP) half an hour weighted average price of such
contract or such other price as may be decided
by the relevant authority from time to time.
Final settlement price RBI reference rate
(FSP)
09
10. Product Specifications - GBPINR
Symbol GBPINR
Instrument Type FUTCUR
Unit of trading 1 (1 unit denotes 1000 POUND STERLING)
Underlying POUND STERLING
Quotation/Price Quote Rs. per GBP
Tick size 0.25 paise or INR 0.0025
Trading hours Monday to Friday - 9:00 a.m. to 5:00 p.m.
Contract trading cycle 12 month trading cycle.
Settlement price Exchange rate published by the Reserve Bank in its
Press Release captioned RBI Reference Rate for
US$ and Euro.
Last trading day Two working days prior to the last business day of
the expiry month at 12 noon.
Final settlement day Last working day (excluding Saturdays) of the
expiry month. The last working day will be the
same as that for Interbank Settlements in Mumbai.
Base price Theoretical price on the 1st day of the contract. On
all other days, DSP of the contract
Price operating range Tenure upto 6 months: +/-3 % of base price
Tenure greater than 6 months: +/- 5% of base price
Position limits
Clients Higher of 6% of total open interest or
GBP 5 million
Trading Members Higher of 15% of the total open interest or
GBP 25 million
Banks Higher of 15% of the total open interest or
GBP 50 million
Minimum initial margin 3.2% on first day & 2% thereafter
Extreme loss margin 0.5% of MTM value of gross open positions.
Calendar spreads Rs.1500/- for a spread of 1 month, 1800/- for a
spread of 2 months, Rs.2000/- for a spread of
3 months or more
Settlement Daily settlement : T + 1
Final settlement : T + 2
Mode of settlement Cash settled in Indian Rupees
Daily settlement price DSP shall be calculated on the basis of the last
(DSP) an hour weighted average price of such contract
or such other price as may be decided by the
relevant authority from time to time.
Final settlement price Exchange rate published by the Reserve Bank
(FSP) in its Press Release captioned RBI Reference Rate
for US$ and Euro.
10
11. Product Specifications - JPYINR
Symbol JPYINR
Instrument Type FUTCUR
Unit of trading 1 (1 unit denotes 100000 YEN)
Underlying JPY
Quotation/Price Quote Rs per 100 YEN
Tick size 0.25 paise or INR 0.0025
Trading hours Monday to Friday - 9:00 a.m. to 5:00 p.m.
Contract trading cycle 12 month trading cycle.
Settlement price Exchange rate published by the Reserve Bank in its
Press Release captioned RBI Reference Rate for
US$ and Euro.
Last trading day Two working days prior to the last business day of
the expiry month at 12 noon.
Final settlement day Last working day (excluding Saturdays) of the
expiry month. The last working day will be the
same as that for Interbank Settlements in Mumbai.
Base price Theoretical price on the 1st day of the contract. On
all other days, DSP of the contract
Price operating range Tenure upto 6 months: +/-3 % of base price
Tenure greater than 6 months: +/- 5% of base price
Position limits
Clients Higher of 6% of total open interest or
JPY 200 million
Trading Members Higher of 15% of the total open interest or
JPY 1000 million
Banks Higher of 15% of the total open interest or
JPY 2000 million
Minimum initial margin 4.50% on first day & 2.30% thereafter
Extreme loss margin 0.7% of MTM value of gross open positions.
Calendar spreads Rs. 600 for a spread of 1 month; Rs 1000 for a
spread of 2 months and Rs 1500 for a spread
of 3 months or more
Settlement Daily settlement : T + 1
Final settlement : T + 2
Mode of settlement Cash settled in Indian Rupees
Daily settlement price DSP shall be calculated on the basis of the
(DSP) last half an hour weighted average price of such
contract or such other price as may be decided by
the relevant authority from time to time.
Final settlement price Exchange rate published by the Reserve
(FSP) Bank in its Press Release captioned RBI Reference
Rate for US$ and Euro.
11
12. Product Specifications - USDINR
Symbol USDINR
Instrument Type FUTCUR
Unit of trading 1 (1 unit denotes 1000 USD)
Underlying The exchange rate in Indian Rupees for a
US Dollar
Tick size 0.25 paise or INR 0.0025
Trading hours Monday to Friday - 9:00 a.m. to 5:00 p.m.
Contract trading cycle 12 month trading cycle.
Last trading day Two working days prior to the last business
day of the expiry month at 12 noon.
Final settlement day Last working day (excluding Saturdays) of the
expiry month. The last working day will be the
same as that for Interbank Settlements in
Mumbai.
Base price Theoretical price on the 1st day of the contract.
On all other days, DSP of the contract
Price operating range Tenure upto 6 months: +/-3 % of base price
Tenure greater than 6 months: +/- 5% of base price
Position limits
Clients Higher of 6% of total open interest or
USD 10 million
Trading Members Higher of 15% of the total open interest or
USD 50 million
Banks Higher of 15% of the total open interest or
USD 100 million
Minimum initial margin 1.75% on first day & 1% thereafter
Extreme loss margin 1% of MTM value of gross open position.
Calendar spreads Rs. 400/- for a spread of 1 month, Rs. 500/- for a
spread of 2 months, Rs. 800/- for a spread of 3
months & Rs. 1000/- for a spread of 4 months or more
Settlement Daily settlement : T + 1
Final settlement : T + 2
Mode of settlement Cash settled in Indian Rupees
Daily settlement price DSP shall be calculated on the basis of the
(DSP) last half an hour weighted average price of such
contract or such other price as may be decided by
the relevant authority from time to time.
Final settlement price RBI reference rate
(FSP)
MCX Stock Exchange Ltd.
Exchange Square, Suren Road, Andheri (East), Mumbai 400 093, India.
Tel.: +91-22-6731 9000, Fax: +91-22-6731 9004
info@mcx-sx.com • www.mcx-sx.com
March2010