Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

Soon Traders Can Trade in Cross Currency Derivatives

46 sec read

Recently SEBI has approved stock exchanges to introduce cross currency derivative contracts (futures and exchange traded options) in multiple cross currency contracts. Approved Cross Currency pairs involves EURUSD, GBPUSD, USDJPY futures and the introduction of exchange traded option pairs EUR-INR, GBP-INR and JPY-INR currency pairs.

The Circular Said “The trading hours for cross-currency derivatives contracts are between 09:00 a.m. and 07:30 p.m.” But traders felt that compared to the 24×5 forex market the approved extended timings wont help much in reducing overnight carry forwarding risk as majority of the news based events trigger post 07:30p.m IST. The Circular did not elaborate whether the extended timings will be applicable for existing currency derivative contracts or not.

For futures contracts in cross-currencies, 12 standardized monthly contracts will be made available to traders and the contracts will be settled in cash (rupees), the regulator said in the guidelines.

Eligible market participants, i.e., stock brokers, domestic institutional investors, FPIs and clients, are allowed to take positions in the exchange traded
cross-currency futures and option contracts.

Before the launch of the cross-currency derivatives and currency options , the stock exchange will have to submit a proposal to Sebi for approval giving the details of contract specifications, risk management framework, surveillance systems and compliance.

Link to the Circular

Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

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