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Currency futures and its benefits
Posted by
09-Aug-13 11:05PM
Currency futures are introduced in India in 2008. The opening of the currency derivatives in India was a revolution in the domestic financial markets. The currency excahange in India is rising day on day only because by increased awareness about the trade among all market players, base of forex market is based on USD-INR futures.
Benefits of currency futures:
There are a lot of benefits of trading in currency market:
Because of transparent price mechanism.
Best for players who need a instrument of hedging.
High liquidity.
Counter-party gaurantee.
Cost is very low as compared with that of banks standarised contracts.
Lower margins and electronic settlement.
Because of all these benefits of forex market, investors from all profiles can take benefit from trading in the currency futures platform, lot size available of $1000 for a USD-INR contract, a retail investor can also hedge his personal currency risk. Additionally, with currency futures being marked on a daily basis, one can exit from one's obligation to buy or sell a currency pair even before the contracts expiry date.
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