Contract Specifications Symbol USDINR Unit of trading 1 1 unit denotes 1000 USD

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INTRODUCTION
Profile

• One of the largest professionally managed stock
  broking and financial services
• company in India ,established in the year 1993

Business

• Brokerage services (equity, derivatives, and
  commodities)
• Depository participant and
• Fee based services including Distribution
  (Mutual Funds/ Insurance / IPO's) and
• Investment Banking

Amongst the large, established reputed
financial services company

• Customer base Retail- 1,50,000 Institutional -
  40
• Distribution through online platform and network
  spread across 128 cities and 303 outlets
• Branches 181 Franchises 175 Sub brokers
  1837
• Trading terminals 3000
• Memberships Licenses BSE, NSE, MCX, NCD EX,
  NMCE, NSDL, PMS
• Head Office at Ahmedabad-
• Corporate office at BKC, Mumbai.

Professionally managed

• Board driven company with a strong team of
  1,200 professional employees including 20
  research analyst

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CURRENCY FUTURES
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INDIAN FOREX MARKET

• Daily average turnover of Indian Fx Market stands
  at USD 34 billion
• INR is fully convertible on the current account
  but not on the capital account
• Participants
• Corporate having commercial exposure
• Authorized Dealers viz banks
• Central Bank
• Flows driving the currency exchange
• Trade Capital flows
• Currency hedging by corporate
• Remittance by NRIs
• Investment by offshore institutions in India
  Indian investments offshore
• FDI FII Flows
• Balance of payment (Net import of USD 90 billion
  for FY 2007-08)

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LIMITATION OF OTC MARKET

• Lack of Price Transparency
• Dealers not available in volatile market hours,
  especially for
• SMEs
• Underlying for the transaction required which in
  turn increases
• the documentation.
• Higher turn around time.
• Banks are running huge Credit risk and MTMs at
  time exceeds
• the limits.

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CURRENCY FUTURE
An agreement between two parties to buy or sell a
standard quantity of currency at a certain time
in future at a predetermined price on the floor
of an organized futures exchange.
Future Contracts are special types of
forward/OTC contracts in the sense that futures
are standardised exchange traded contracts.
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OTC vs FUTURES
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DETERMINANTS OF CURRENCY EXCHANGE RATES

• Macro Economic Views
• Monetary Policy
• RBI Intervention
• Currency Flows
• Performance of other Asian Currencies
• Performance of Equity Market
• USD Sentiment
• Performance of key commodities
• Policy Announcements affecting flow- trade or
  capital
• REER Real Effective Exchange Rate
• Data Announcements

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PRACTICAL USE OF CURRENCY FUTURES

• Hedge
• A transaction in which an investor
  seeks to protect a position or anticipated
  position in the spot market by using an opposite
  position in derivatives is a Hedge Transaction.
• Speculation
• Buying or selling of a contract by
  taking a view on the market, in the hope of
  profiting from subsequent price movements.
• Arbitrage
• Arbitrage means earning risk-free
  profits by simultaneously buying and selling
  identical or similar instruments in different
  markets.

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HEDGING

• Hedgers are the people who are exposed to risk
  due to their normal business operations and would
  like to eliminate/minimize their risk.
• Illustration An exporter having receivables of
  USD 5,00,000 on 30th Nov is
• exposed to the risk of
  Dollar appreciation.
• Hedge Strategy
• Spot 30Nov F
• Today 43.78 43.7000
  
• Sell 500 USDINR Future contracts of 30 Nov at
  43.7000
• On 30th Nov, Sell 5,00,000 at the rate of 43.45
  and Buy 500 USDINR Future contracts of 30 Nov
  for 43.4500
• Receivables in Spot Market Rs. 2,17,25,000
  (50000043.45)
• On 30th Nov
• Spot P/L in Futures
  Receivables in Spot Net receivables
• 43.45 125000
  21725000
  21850000
• 43.75 (-25000)
  21875000 21850000
• So if rupee moves either way corporate is hedged
  against currency fluctuation.

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SPECULATION
- Based on his forecast, a speculator would like
to make gains by taking long /short positions in
derivatives

• USD/INR 29th Sept Contract 43.90
• Current INR to
  depreciate
• Position in Futures
  Buy USD/INR future contract
• Position at maturity (29 Sep 08) 44.00
• Profit/ Loss
  Profit Rs. 100 on 1 contract
• A currency future contract is similar to a
  futures contract on any Scrip or Index

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CONTRACT SPECIFICATIONS

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THE BEGINNING

In a landmark development, NSE introduced the
INDIAS first exchange traded Indian Rupee
currency futures contract on August 29,
2008. The exchange recorded a volume of 65.74
million (Rs 298.86 crore) in a total of 65,743
contracts on the first day of trading. The rupee
opened at Rs 44.25 against a dollar and ended at
Rs 44.02 before touching intra-day high of Rs 45.
This provides not only one more
asset class to play around with, but by taking
in currency futures, one will be able to
safeguard his equity portfolio, which is
sensitive to currency movement
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WHY ANAGRAM?

• Highly efficient In-House Research Support
• Deep insight of Technical Fundamental Research
  aspects
• Attractive Brokerage Rates
• Extensive Branch Network, spread to as many as
  200 cities
• Provides Direct Trading Terminals working towards
  customer convenience.
• High Tradition Trust of LalBhai Group.

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THANK YOU !