Rajandran R Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, USDINR and High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in and Co-Creator of Algomojo (Algorithmic Trading Platform for DIY Traders)

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.

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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 Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, USDINR and High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in and Co-Creator of Algomojo (Algorithmic Trading Platform for DIY Traders)

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