Currency Derivatives

Futures Contract is a standardized exchange traded contract to buy or sell a certain underlying instrument at a certain date in the future at a specified price. The underlying instrument in Currency future is a foreign exchange rate. The price of a future contract is expressed in terms of INR per unit of other currency e.g. US Dollars. Currency future contracts allow investors to hedge against foreign exchange risk. Currently Currency Futures are available on four currency pairs viz. US Dollars (USD-INR), Euro (EUR-INR), Great Britain Pound (GBP-INR) and Japanese Yen (JPY-INR).

Current Market Reports

About Currency Derivatives

MSEI Exchange launched its currency futures trading platform on October 07, 2008. Currency futures on USD-INR were introduced for trading and subsequently the Indian rupee was allowed to trade against other currencies such as euro, pound sterling and the Japanese yen.

Products Specification

Currency Derivatives segment of MSEI provides trading in derivative instruments like Currency Futures on four currency pairs, Currency and each of these currency contracts on MSEI has a life of 12 months from the month in which it is launched

How it works

  • Presently, all futures contracts on MSEI are cash settled. There are no physical contracts.
  • All trade on MSEI takes place on its nationwide electronic trading platform that can be accessed from dedicated terminals at locations of the members of the exchange.
  • All participants on the MSEI trading platform have to participate only through trading members of the Exchange.
    • Participants have to open a trading account and deposit stipulated cash/collaterals with the trading member.
  • MSEI stands in as the counterparty for each transaction; so participants need not worry about default.
    • In the event of a default, MSEI will step in and fulfil the obligations of the defaulting party, and then proceed to recover dues and penalties from them.
  • Those who entered either by buying (long) or selling (short) a futures contract can close their contract obligations by squaring-off their positions at any time during the life of that contract by taking opposite position in the same contract.
    • A long (buy) position holder has to short (sell) the contract to square off his/her position or vice versa.
    • Participants will be relieved of their contract obligations to the extent they square off their positions.
  • All contracts that remain open at expiry are settled in Indian rupees in cash at the reference rate specified by RBI.