Currency Markets

Why Should One Invest in Currencies?

• It is the largest Financial Market in the world

• There are four currency pairs available on the Indian exchanges, making it easier to trade

• It is a highly regulated and low-risk product

• Lower margin requirement

Market Structure

MCX NSE USE

FEDAI

FX BROKERS

Reserve Bank of India

SEBI BANKS

Basic Terms

Futures and Options trading is permitted over the Currency Exchange

• Initial Margin: The up-front money that must be paid by a customer at the time of entering into a contract

• Exposure Margin: The margin money charged by the exchange to ensure that the initial margin does not decline below a particular level

• Additional Margin: In case of sudden higher-than-expected volatility, the exchange calls for additional margin, which is a pre-emptive move to prevent a breakdown

• Mark-to-Market (MTM): At the end of each trading day, the margin account is adjusted to reflect the trader's gain or loss. This is known as marking to market the account of each trader

Product Specifications

Daily Settlement Closing price of each contract – last 30 minutes weighted average T + 1 Through your clearing member Paid or received in cash

Final Settlement RBI fixing price at 12 noon on last trading day Net settled in cash

Contract Information

Currency Lot size Price Quote Margin (%)

Profit / Loss (Per Tick in

Rupee)

USD - INR 1,000 0.0025 5% 2.5

EUR - INR 1,000 0.0025 5% 2.5

GBP - INR 1,000 0.0025 5% 2.5

JPY - INR 100,000 0.0025 5% 2.5

Factors Influencing Prices

Macro Economic Factors:

1. Monetary action/policy

2. RBI intervention

3. Dollar liquidity

4. Economic and Political scenario

Micro Economic Factors:

1. Global sentiments

2. Performance of other currencies

3. Geo-political situations

4. Commodity price movements

Market Timings

Product Monday - Friday Saturday NSE Currency Derivates 9 AM - 5 PM Non Working Product Monday- Friday Saturday

NSE Currency Derivatives 9 AM - 5 PM Non-Working

• Users of currency (Hedgers)

• Currency Traders (Speculators)

• Investors – Retail & HNI

Type of Clients

Market Activity

Hedging• Banks

• Importers & Exporters

• Corporate

Trading / SpeculationView on appreciation / depreciation of USD,EUR,GBP,JPY against INR

Arbitrage• Inter-market (OTC Forwards and NSE - Futures)

• Inter-exchange ( NSE and MCX-SX, NSE and DGCX)

OTC v/s Exchange Traded Futures

  OTC Market Exchange Traded Futures

Price Transparency Low; bilateral contracts with banks High; online real-time screen

Liquidity Subject to credit limits Margins equate all participants

Settlement Fully notional unless cancelled Net settled in INR

Credit Exposure Exposure to your counterparts (banks)

Clearing all trade guarantee from

corporations

Execution Only banks 500+ trading members including banks

Margins / MTM Margins & MTM not requiredMargins & MTM are

mandatory

• Supply and Demand

• Rise in debt

• Growing uncertainty on global economies

• Capital Market Movements - Outflows/Inflows

• Global liquidity

• Hedge Funds

Fundamentals of Currencies

• International currency

• Safest after Gold

• Currency used to Buy / Sell global commodities

Characteristics of USD

Services Offered

• Daily Technical Calls: Profit from daily trading ideas based on proven technical expertise provided through SMS

• Positional/Medium Technical Call Report: Short-term (weekly) view-based fundamental and technical calls on select currencies

• Focused Currency Report: In-depth study of fundamental and technical aspects of select currencies

• Daily margin reporting on currencies: Report on daily margins as specified by the exchanges

Why Asit C. Mehta?

• We believe in creating value for each individual who relies on us for his/her investment needs

• We advise our clients to trade depending on the opportunity, as opposed to trading to generate brokerage

• We pay more importance to the quality rather than the quantity of calls we generate

• We provide intra-day as well as positional calls

• We professionally advise clients on their individual trading positions

• We operate a research desk that is well-equipped to cater to your investment needs

• We undertake risk management on a real-time basis

• We are launching an updated website with online web-based trading services shortly

Risks to be Considered

• Understand the concept of leverage

• Know the amount of gain or loss that will result from any given change in the price of the particular futures contract that you are trading

• If you are uncomfortable with huge losses, always put a stop loss in the contract that you are trading

Trading Mantras

• Plan your trade

• Keep records of your trading results

• Limit your losses - use stop loss

• Never cancel a stop loss order after you have placed it

• Have you taken a loss? Forget it quickly

• Have you taken a profit? Forget it even quicker!

• Always maintain self-discipline by following a pre-determined set of rules

How to Get Started?

Documents Required:

• 1 photograph

• Pan card photocopy (self attested)

• Address proof (self attested)

• Last 6 months’ Bank Statement (self attested)

• Cheque in favour of Asit C. Mehta Investment Interrmediaties Pvt Ltd.

THANK YOU