Knowledge Centre

  • Knowledge is power
  • Information is liberating
  • Education is the premise of progress, in every society
Currency | February 04
Benefits of Currency Trading in India

Currency or forex trading is the most heavily traded markets in the world with volumes standing at $5 trillion a day, much more than that traded on NYSE. In India, this market is on the rise with daily transactions increasing exponentially. Earlier, there were only big tickets players like banks, institutional investors trading heavily in this market. However, with the advent of derivative products, even retail participants can leverage this opportunistic market. Here are some major benefits for entering this market in India:

  1. Lower margin requirements: Unlike equity markets, Currency trading allows you to buy and sell by keeping only a small percentage of the position. This allows the traders to achieve the optimum rate of return on their deployed capital.
  2. Arbitrage: The currencies are traded on exchanges like NSE and BSE in India. The traders can benefit from the inefficiencies in the price from buying low to selling high on different exchanges.
  3. High Liquidity: One of the most important criteria to run a business is enough liquidity, which means to convert the asset into cash. Currency trading is the largest market in terms of volume turnover in the world. One can speedily enter and exit huge positions with a single click.
  4. Hedging: The process to protect your existing investment portfolio against future unforeseen losses. This is usually practiced by residents to protect their offshore investments and NRIs to hedge their domestic portfolio. It is also adopted by importers and exporter to limit their losses owing to currency rate fluctuation.
  5. Speculation: To gain from the highs and lows of the currency exchange rates, a trader must know the possible direction. For example, there is a possibility of USD appreciation with crude oil price rises, the trader would buy USD/INR future. Similarly, if there is a possibility of INR appreciation, they would short sell USD/INR futures to make a profit from the movement.
  6. Lower entry barrier: The introduction of the derivative product in the last few years has opened the door of forex trading to the retail traders. With a small capital also, it is possible to make a mark with the correct strategy.

Once a trader ensures their journey with the currency market, there is no looking back. There is always a market open in the world, even when the domestic market closes. With the massive expansion of the decentralized market over the years, millions of traders are working hard every day to grab a piece of their profit.

COMMENTS

No Comments Found

Contact Us

img
img
img
img
img

Important Message The information contained in this file is provided for informational purposes only, and should not be construed as legal advice on any matter. The content and interpretation of the law addressed herein is subject to revision. We disclaim all liability in respect to actions taken or not taken based on any or all the contents of this file to the fullest extent permitted by law. Every effort is made to avoid errors. In spite of that, errors and discrepancies may creep in. It is expressly stated that neither Findoc Investmart Private Limited nor any of the contributors of updates will be responsible for any damage to anybody on the basis of this document. Readers are, therefore, requested to cross check with the original sources e.g. Government publications, Orders, Judgments etc., before taking any action or making any decision. These services are being provided through our group companies Findoc Capital Mart Pvt Ltd and Findoc Finvest Private Limited

Attention Investors
  • 1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.
  • 2. Update your mobile number & email Id with your stock broker/depository participant and receive OTP directly from depository on your email id and/or mobile number to create pledge.
  • 3. Pay 20% upfront margin of the transaction value to trade in cash market segment.
No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries forrefund as the money remains in investor's account."
Prevent Unauthorized Transactions in your demat account --> Update your Mobile Number with your Depository Participant. Receive alerts on your Registered Mobile for all debit and other important transactionsin your demat account directly from NSDLon thesame day......................issued in the interest of investors."

FINDOC INVESTMART PVT. LTD./FINDOC FINVEST PVT LTD.

Registered Office :

SCO 210-211, Sector 34-A Chandigarh-160022

Corporate Office :

4th Floor, Kartar Bhawan, Near PAU Gate No.1, Ferozepur Road Ludhiana -141001.