5 Awesome Things You Can Learn From Currency Futures In India

 In terms of trading, the largest market happens to be the global forex market. But behind it, there is also a currency futures market offering a respectable frequency of daily transactions. Currency futures are mainly future contracts traded over exchange to buy or sell at a specific date in the future, at a scheduled price. Traders from India have also started to invest in currency futures in the hope of speculating their money. Go through the following article to know more about currency futures in India.

Wide Variety of Future Contracts

In India, traders get a wide variety of “currency futures” contracts for trading. Apart from the popular contracts that you like to trade in, such as INR/USD, INR/EUR and EUR/USD, there are also other types of currency futures contracts available. These are E-Micro Forex Futures contracts which are traded at 1/10th of the size of the regular currency futures contracts. It also includes market currency pairs, like USD/PLN (U.S. dollar/Polish zloty future contracts) and USD/RUB (U.S. dollar/Russian Ruble future contracts).

Special Exchanges For Currency Futures

In the case of forex, you take help from currency brokers for trading contracts. But in currency futures, you get to trade on exchanges that offer regulation in terms of centralized clearing and pricing. Therefore, the market price of currency future contracts stays relatively the same irrespective of which broker you are using. Currency futures in India are regulated by the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI). 

Profit Opportunities

Traders and investors are often drawn towards high-liquidity markets because they offer a better opportunity of making a profit. Emerging markets typically have lower volume and liquidity so they take time to become popular among investors. But currency futures contracts are one of the most traded ones and are associated with the greatest liquidity, which means a good chance of making a profit. 

Some of the most popular currency future pairs are listed below:

• Australian Dollars/US Dollars Futures

• Canadian Dollars/US Dollars Futures

• Euro/US Dollars Futures

• British Pound/US Dollars Futures

• Swiss Francs/US Dollars Futures

• Euro/British Pound Futures

• Euro/Japanese Yen Futures

• Japanese Yen/US Dollars Futures

• New Zealand Dollars/US Dollars Futures

Know Contract Specifications In Advance

Currency futures in India comprises a variety of specifications including the minimum price increment, size of the contract and the corresponding tick value. With these specifications, traders can determine account requirement, position sizing as well as potential profit or loss of different price movements in the contract.

Settlements

Two main methods can be used to make settlements in case of any issue with currency futures contracts. Most of the time, buyers and sellers offset their original positions at least one day before the day of trading by taking an opposite position. Whenever an opposite position trade gets closed before the last day of the trading, a profit is credited, or in another case, the loss is debited, from the trader’s account. 

In a few cases, contracts are also held until the date of their maturity and at this time the contract is settled by cash or delivered physically. But this also depends on the specific exchange and contract. 

Requirements Of A Trading Account

Currency futures are traded through a trading account. These trading account services are offered by brokers that direct orders on behalf of the trader to the various exchanges. With the help of these orders, traders can buy or sell currency futures contracts. LKP Securities in India offers trading accounts related services, helping users to trade in currency futures contracts.

Along with Forex, investors and traders also get another option to trade in currency and that option is currency futures. The particular type of investment enables traders to either hedge or speculate their money. At present, there are a variety of online service providers offering great outcomes. If you also want to invest in currency futures in India, you can go to LKP Securities as per convenience. LKP Securities acts as an accurate broker and offers a variety of facilities for trading in currency futures. Along with that, it also provides a variety of trading services like stock trading, derivatives, equity and commodity. You can even invest in mutual funds through the same.