“Never keep all your eggs in one basket” - Financial markets are a classic example of this proverb. These markets all around the world in all categories and at all points of time have taught us to keep our investments diversified into various instruments. Hence, we at Vedika Securities have brought a new investment opportunity for all Resident Indians, who can now diversify their portfolio, by trading in Currency Derivatives.
Currency derivative is a contract between the seller and buyer, whose value is to be derived from the underlying asset, the currency amount. A derivative based on currency exchange rates is a future contract which stipulates the rate at which a given currency can be exchanged for another currency as at a future date.
Advantages of Currency Futures?
Small Size: Volume of single lot in currency derivatives is only approximately Rs.50000, whereas equity and commodity futures which sometimes go above Rs 1 lac. This small size will help in greater participation as even small retail clients can trade in this.
Low Volatility: Central bank vigilance and high volume make the currency markets very stable. Further currency markets are open round the clock and it is matter of time only when our currency markets will also be round the clock. This helps in minimizing gap ups and gap downs and better management of risk by brokers as well as clients. You can’t loose big money in this.
Low Margin: Due to low volatility the margin required is only 3-5% against 5-10% in commodities and 15-20% in equities leading to low cost of trading.
Lower Cost of Trading: Low margin, low brokerage and transparent prices make this market very cost effective.
Easy Accessibility to all: Currency market through banking system is only accessible to importers and exporters whereas this futures market is available to anyone with a very small margin on a single lot .This is first time in India that retail participants can take part in the currency trading.
Focused Trading: Currency trading is very focused in the sense that majority of trading worldwide take place only in 5-6 major Currencies like us Dollar, Euro, Japanese Yen, sterling Pound, Swiss France, Canadian dollar, Australian Dollar etc. This provides greater depth as there are not hundreds of scripts to watch as in equity.
For further details and clarification please contact (033) 22231245 / 22234222