Online Forex Trading, Currency Trading India
For a very long time there were limited options for small traders and small businesses
to trade in currencies. The only currency market was the rupee forward market which
was essentially an inter-bank market. These were forwards and not exchange traded
futures. Only exporters and importers could indirectly hedge their dollar exposure
through their banks. So an importer would buy forward dollar to protect against
rupee depreciation while an exporter would typically sell forward dollars to protect
against rupee appreciation.
The advent of currency futures in India…
In fact, currency futures trading on the stock exchanges started less than 10 years
ago. The currencies are tradable in currency pairs and one can trade hard currencies
like the dollar, Yen, Pound and the Euro. Of course, LKP offers you a much larger
palate through its membership of the DGCX, Dubai. LKP offers online forex trading
on the NSE and the Metropolitan Stock Exchange and the trades can be executed in
the normal trading account itself within the limits specified by the exchanges and
the RBI from time to time. Currency trading in India has become a lot simpler after
the advent of currency trading as it enables you to hedge your currency risk through
the exchange mechanism itself. Being an exchange product, these currency futures
are guaranteed by the clearing corporation and hence there is no counterparty risk.
Currency Trading Section on LKP Securities…
The currency trading section on LKP contains curated information to enable you to
do online forex trading in a more systematic and intelligent way. The section combines
news, price movements, international triggers and specific currency dynamics to
give you a 360 degree view of the currency market. You can also read up a host of
relevant news and event analysis that can help you take a more informed decision
on currencies. Above all, remember that online forex trading can be used for taking
a view on currencies and hedging risk. Here is how currency trading in India works…
How currency trading in India actually works…
You can use your existing equity trading account for trading in currencies too.
Let us look at two different situations and see how to trade through the currency
futures market in India…
Situation 1: Your view is that India could hike interest rates which could
lead to greater FII flows into debt. That means the INR will get stronger and the
Dollar will get weaker. You can play this view by selling the dollar pair at 67/$
and buy it back when the INR appreciates to 65/$. The minimum lot size is $1000
and you make a profit of Rs.2 in this trade.
Situation 2: You have to pay the fees for your daughter’s US University in
dollars at the end of 3 months. You are worried that the dollar may become stronger.
You can hedge your risk by buying the dollar pair.
Your online forex account helps you to trade currencies and the LKP currency page
empowers you with curated information and insights.