Q. What is Currency Futures?
A currency futures contract is a standardized form of a forward contract that
is traded on an exchange. It's an agreement to buy or sell a specified quantity
of an underlying currency on a specified date at a specified price. In India, currently
four currency pairs are traded (USD/INR, EURO/INR, GBP/INR and JPY/INR) with a lot
size of 1000 units of the base currency, except JPY where the lot size is 100,000.
Settlement for the customer is, however, done in Rupee terms and not in the foreign
Q. What is a futures contract on the INR/USD exchange rate?
It is exactly like a futures contract of Nifty or of Infosys. A futures price is
traded on the screen. That pertains to the INR/USD exchange rate at a future date.
If the spot price goes up, the futures buyer makes a profit at the expense of the
Q. Advantage of Currency Futures?
Transparent & Efficient price discovery.
Ease of trade.
No paperwork required at branch level unlike forward contracts.
Submitting proof of underlying is not a precondition.
Q. How do I start trading in Currency Futures?
Currency Futures can be bought and sold through the trading members of National
Stock Exchange. To open an account with us you will be required to complete the
KYC norms which include signing of member constituent agreement, constituent registration
form and a risk disclosure document.We will allot you a unique client identification
number. To begin trading, you will be required to deposit cash or collateral (Approved
Equity shares) with us as may be stipulated. Send in an order to us exactly as you
do in NSE Derivative / Future & Options to begin trading.
Q. What is the contract specification of USDINR futures contract?
Unit of trading
1 lot (1000 Dollars)
Hours to trade
Monday to Friday (9:00 AM – 5:00 PM)
12 Calendar months
Final Settlement day
Last working day of the month of delivery
Movement per Tick
Last Trading day of month
2 working days prior to Last business day of the delivery month.
Daily - T+ 1
Final - T+2
Final Settlement Price
RBI reference rate on the date of delivery of contract
Mode of Settlement
Cash Settlement in INR
Q. What is the difference between long position and short position with reference
to Currency Futures?
When one buys a Currency Futures, it is called 'long position' and when one
sells a Currency Futures it is called 'short position'. It may be noted that open
long or short positions taken in Currency Futures can be offset (squared off) by
taking the opposite position, before the contract expiry date or hold till expiry
and settle the contract at Final Settlement Rate (RBI Reference Rate).
Q. Is it possible to put a limit order and stop loss order?
Yes, it is possible to put a limit order and stop loss order. These orders
will remain in the order book as open orders and once they are executed, they will
Q. Is it possible to modify or cancel unexecuted orders?
Unexecuted orders can be modified or cancelled. After an order is executed
into a trade, it is not possible to change the order parameters or cancel the same.
Q. What is mark to market?
Marking to market of outstanding positions refers to the valuation of the outstanding
long and short positions with the latest market price of the Currency Future Contract
as compared to the value at which the open position has been taken. At the end of
the trading session, all outstanding positions are repriced at the daily settlement
price or closing price of that session.
Q. How is margin money collected?
Margin money is collected in various forms, such as:
- Cash deposits.
- Approved Securities : Equity shares (Approved securities are accepted with applicable
Q. What is open interest?
Open interest refers to the outstanding long or short positions. For every
long position taken, there is a short position created.
Q. Who can participate in trading in exchange-traded currency futures market in
Any resident Indian entity, including importers, exporters, SMEs, banks, and
financial institutions can participate in the Futures Market. However, at present,
Foreign Institutional Investors (Flls) and Non-Resident Indians (NRIs) are not permitted.