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Agenda
Derivatives Introduction to currency derivatives Foreign exchange market History of currency futures Currency futures market Contract specification in currency derivatives Factors effecting the exchange rate Clearing and settlement Trading strategies in currency future Growth of the currency futures Conclusion
EXECUTIVE SUMMARY
Risk is the inherent component involved in all financial activities. Everybody tries to reduce the risk as to the extent of possible with a view to enabling entities to manage the volatility in the currency market. Currency futures are contracts to buy or sell one currency (only dollar-rupees as of now) against another at a specified price and date in the futures. The main objectives of the study is understand the currency futures market, Growth of the currency future market and different strategic are using in currency futures. This topic I decided to do this project under the guidance of my internal guide and external guide at India Info line Ltd. The study is mainly from secondary sources of data which include the NSE website and website of the company. There are no primary sources available in this branch. India has a strong presence in the worlds economic activities so a strong need felt by RBI and SEBI to do something in this area. Hence a working committee has been formed and according to their suggestions trading in currency futures started in India. India info line is a good company which is listed on the NSE and BSE.. The company gives more profit to the investors. And also gives true advice to investors. So that more people are interested to invest their money in this company.
Company profile
India info line ltd was originally incorporated on October 18, 1995 as Probity Research and service Private Limited in Mumbai under the companies Act, 1956. We became a public limited company on April 28,2000 and the name of the company was changed to Probity Research and service Limited .The name of the company was changed to India Infoline.com on May 23, 2000 and later to India Info line Limited on march 23, 2001. The company is part of India Info line Group. It has pan- India presence through its distribution network of 607 branches, 151 franchises located in 346 cities. The company also has a presence in Dubai, New York and Singapore. India Info line provides a gamut of financial products and services. The company offers booking services in the Cash and Derivatives segments of the NSE and BSE. IIFL (Asia) Pte- This subsidiary is engaged in carrying out financial sector activities in other Asian markets.
Objectives
To understand the currency futures market in India To understand the clearing , settlement of currency futures
To study the strategy of the currency futures market so that client will benefit. To understand the growth of the currency futures
Derivatives
Securitas under the Securitas contract Act,1956 and hence the trading of derivatives is governed by the regulatory framework . A product whose value is derived from the underlying asset. Underlying asset can be equity, commodity or other asset. Has a future settlement date
First currency futures Chicago Mercantile Exchange (CME) IN 1972. International Monetary market (IMM) lunched trading in several currency futures on may 16,1972
fundamental
Technical
Political
Clearing House
Each exchange has a clearing house National securities clearing corporation limited (NSCCL) undertakes clearing and settlement of all trades executed on the currency derivatives segments of the NSE. In clearing house there are 3 member 1. Trading member 2. Trading-cum-clearing member 3. Professional clearing member It also acts as legal counterparty to all trades on the currency derivatives segment.
conclusion
The currency futures give standardized contract to its investors and individuals who are aware forex market or predict the movement of exchange rate so they will get the right platform for trading in currency futures Because of exchange traded futures contracts and its standardized nature gives the counterparty risk minimized. Initially only NSE had permission but now BSE and MCX has also started the currency futures. Mainly currency futures are using hedging purpose to minimize the risk. And there are two strategy also used in the currency futures market one is hedging and speculation . Actually currency futures not only used by businessman, exporter, importer but also individual who are interested having knowledge about forex market then can also invest in currency futures .