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How to start currency trading in India?
Currency derivatives introduced in India in the year 2008 are by far the best available hedge for individuals with exposure to currency risk. At present only the futures contract for currency derivatives are available for trading.
Currency futures with currency as an underlying asset are standardized contracts in respect of delivery time and lots. The contracts are binding upon both the parties to buy or sell the financial instrument at a pre-defined price in future time. Price i.e. the variable factor is determined by the market forces.
To begin with trading in currency futures, you need to register first for the currency derivative and complete the documentation process in case you already have a demat and trading account with the broker. Else, you need to open a trading and demat account for trading in curreny futures in any of your selected brokerage firms.
Documentation requirements for registering for currency trading include submission of currency derivatives forms that includes agreement, risk, disclosure document in addition to the request letter. Identity and address proof will also be required in case you are a new customer. On processing of the requisite documents on the part of the brokerage house, trader will receive an intimation and can soon commence trading in currency futures.
Procedure to kick-start with currency trading
Once you have received intimation for the registration of currency futures for your account with the brokerage. You can begin trading after the following steps, that include, logging in the account through your log-in credentials and later accepting the online terms and conditions stipulated for currency derivatives. Also, you need funds for trading that you can allocate for the category using link for Modify Allocation.
The trading hours for trading in currency derivatives is allowed by different brokerage houses during the hours specified by the exchanges. At present, trading in currency on NSE is available from Monday to Friday between 9:00 am -5:00 pm.
Trading can also be done by opting for the calling facility that brokerages offer by placing the order via their call centers.
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