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World’S Largest Market - Driven By Fundamentals

The economies of the world are connected with each other through a vital link viz. currency markets. Every country deals with a host of other countries for imports, exports, remittances, and other fund flows. Each economy deals in an identified currency. Through the exchange rate mechanism and currency markets, they deal with the other country. That is how, the currency markets are the biggest, finest and most vibrant of all markets, active 24 x 7, 365 days. It provides a platform to hedge currency exposure, a platform to trade based on a view on currency markets and also lots of derivatives to meet diverse objectives. Exchange-based currency markets are relevant to a whole lot of entities.

BENEFITS OF CURRENCY TRADING

01

View-Based Trading

For Individuals & Corporates

Take advantage of the two-way movement of markets through Currency Futures & Options using our online currency trading platform. What makes Forex trading using Futures and Options a must-have for all investors’ portfolios are advantages like small margin requirements, lower entry barriers, and multiplicity of options.

02

Arbitrage

For Individuals & Corporates

Investors can benefit from the price difference in two ways – the difference in price between different markets and between different exchanges. Furthermore, they can also benefit from arbitrage on the prices between OTC* and ETCD^ market.

03

Investors Residing in India

For Individuals

Indian residents looking to invest abroad, can use currency derivatives to hedge their offshore investments

04

NRI Investors

For Individuals

Investing in currency Trading in India is not just for residents, even as an NRI (Non-Resident Indian) you will be able to protect your portfolio from currency risk while investing in India.

05

Hedging for Importers & Exporters

For Corporates

In case of fluctuations pertaining to exchange rates, you will be able to take appropriate positions and hedge any potential losses from your exports or imports.

06

Hedging for Foreign Currency Loan Borrowers

For Individuals

Investors will be able to hedge all unexpected increases in periodic repayments of Foreign Currency Loan if there are fluctuations in the exchange rates.

OTC: Over-The-Counter Market (Off-Exchange Market)

ETCD: Exchange Traded Currency Derivatives Market

WHAT MOVES THE USD/INR EXCHANGE RATE IN THE FOREX MARKET?

Events likely to impact USD/INR rate General trend for demand/supply of USD IMPACT on USD IMPACT ON INR
Increase in Imports by India Demand for USD increases as importers have to pay in USD Appreciates Depreciates
Increase in Exports by India Supply of USD increases as exporters get paid in USD Depreciates Appreciates
RBI buying USD to absorb excess USD liquidity due to Forex inflows Demand for USD increases Appreciates Depreciates
RBI selling USD to meet demand for the USD Supply of USD increases Depreciates Appreciates
Negative trade balance (Total Imports are more than Exports) Demand for USD increases Appreciates Depreciates
Positive trade balance (Total Exports are more than Imports) Supply of USD increases Depreciates Appreciates
Rise in global Oil prices Demand for USD rises due to costlier oil imports Appreciates Depreciates
Fall in global Oil prices Supply of USD increases due to cheaper oil imports Depreciates Appreciates
FIIs selling their investment in Indian shares & bonds Demand for USD increases as they take home USD after selling Appreciates Depreciates
FIIs investing in Indian shares & bonds Supply of USD increases as they bring USD to India for investing Depreciates Appreciates
Increase in Forex remittances by NRI’s Supply of USD increases Depreciates Appreciates

WHY INVEST IN CURRENCY WITH US?

The best part about currency market trading is that you don’t need to open a new account or have different funds for this asset class. Your Cash margin and collaterals across Equity, F&O, Mutual Funds & Currencies can be used for all the 4 segments & on a single platform. No separate investment is required for currency trading or cross-currency trading.

benifits
  • Standardized Lot Size
  • Exchange-Traded & Transparent
  • Highly Liquid
  • Instant Transactions
  • Low Margin, High Leverage
  • Low Taxation compared to Equities & Commodities (No STT and CTT applied)
  • Interbank Market
  • Governance by both the SEBI and RBI
  • The convenience of Cash Settlement
  • No-Insider Trading
  • On-call & Online trading facility
  • No requirement for the underlying position if you are a trader
  • Low Margins, Low Bid-ask Spreads
  • Anonymous order matching facility
  • Robust settlement systems with counterparty guarantee 6 Months contract can be traded at a time, each contract is a monthly contract

Currency Trading FAQ

What is Currency Trading?

An agreement to buy or sell a standard quantity (one lot or its multiples; 1 Lot = USD1,000) or in (GBP,EUR. JPY Vs INR) of a specific foreign currency (FX against INR) at a specified future date (near 12 calendar month ends) through an exchange (NSE or BSE) at an agreed price. Since its traded on exchange it’s also called as Exchange Traded Currency Derivatives.

What are the types of Exchange Traded Derivative Contracts ?

The types of Exchange Traded Derivative Contracts permitted are:

  • 1. 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 currency.
  • 2. Currency Options
  • Currency Options are contracts that grant the buyer of the option the right, but not the obligation, to buy or sell underlying currency at a specified exchange rate during a specified period of time. For this right, the buyer pays premium to the seller of the option. In India Exchange Traded Currency Options are available in USDINR, with a lot size of 1000 units of the base currency. Settlement for the customer is, however, done in Rupee terms and not in the foreign currency.

What are the salient features of Currency Trading?

  • Exchange-Traded
  • Standardized
  • Counter-party risk is absent (Settlement of trades is guaranteed)
  • Requirement of margins
  • Marked-to-Market everyday
  • Net-Settled in INR

Advantage of Exchange Traded Currency Derivatives :

  • Participation possible without underlying
  • Bid-Ask spread as low as 0.0025 INR, (near month)
  • Absolute price transparency – same real-time outright price available to you
  • Can trade/hedge as small as $1000 without price and client discrimination
  • Total accessibility – remote trading platform possible on your desktop/laptop
  • Best 5 orders available in the market can be accessed/seen easily by you

Why should I Invest in the Currency Market?

  • Safe compared to Share trading
  • It provides transparent prices.
  • You can Trade USD/EURO/GBP and JPY against INR
  • Standardized, exchange-traded and guaranteed by the clearing corporation.
  • You can take benefit of arbitrage on the prices between OTC and futures market.
  • One may hedge the underlying exposure and protect the earnings from the volatility of the market place.

Who All Can Trade in Currency?

  • Regular Traders – who want to do view, based trading
  • NRIs – Who invest in India and want to insulate themselves from currency risk
  • Arbitrageurs – who want to take benefit of the price difference on various exchanges
  • Hedgers – Who want to hedge Export / Imports or Foreign exchange Loans

How do I trade in the ETCD market?

Clients need to put a margin for taking a position and in order to trade in the ETCD market.

What is the margin?

One needs to have a specific amount deposited into the margin account to buy currency in the trading account, it can be in the form of cash or collateral as specified by the regulator's example. Of accepted collateral are stocks, mutual funds, Bonds, and Fixed deposits.

Do I need to open Demat account for currency?

No there is no need to open a separate Demat account. However, clients need to provide cash or collateral for taking a position.

Which are the exchanges used for currency trading in India?

In India, most commonly used exchanges are NSE (National stock exchange) and BSE (Bombay stock exchange)

Does currency market have central location?

Currency trading is not done through one central location, it is actually conducted by electronic communication networks and mobile networks around the world.

How are the prices of currencies determined?

  • The most important factor that determines the currency prices is supply and demand.
  • Interest rates, inflation, international trade and political stability are the other factors that determine the market.

What is spread?

Spread is the difference between the price quoted for Immediate Sale (offer) and Immediate Purchase (BID)

I am an ACMIIL client do I require new account for trading in Currency Trading?

No! There is no need to open a new account for trading in currency. Only an additional segment code will be assigned to you when you express your interest in ETCD.

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Fees and other Financial Terms and Conditions for Investing in Stock Baskets

  • The Client agrees to pay the fees calculated in the manner and on the rates as provided in the Schedule I.
  • The Basket profits or returns would include any dividends, benefits received out of corporate actions.
  • All the costs, fees, charges as per schedule I and expenses of whatsoever nature incurred by us in connection with the acquisition, holding, sale and transfer, in respect of the dematerialised state charges of the Depository Participant, in respect of Securities shall be paid by the Client.
  • A new separate DP account is required for all investors for the basket investments.
  • For new and existing clients, the Demat account will be used only for equity basket and Investor is free to open separate Demat account for self managed investment.
  • During the course of investment, we will invest as close as possible to the basket amount. Some small surplus to be left due to rounding off that amount will be managed /invest/return to the investor as suitable.
  • The stocks in the basket will be as per the discretion of the ACMIIL. These stocks would be reviewed from time to time and the rebalancing, (if any), of the stocks in the basket would be at the discretion of ACMIIL.
  • You are free to exit basket wise or exit from all basket at any point of time. You are not allowed to selectively exit from any stock or add any stock to the basket.
  • In case of a bank mandate, we will need 20% more mandate of the basket amount as the stock price will fluctuate time to time. The amount taken from bank would be actual value of Basket.
  • The Client agrees that in the event of a dispute, the Claims, if any, by the Client cannot exceed the fees paid by the Client for the year for advisory services in Rupee terms.
  • The client agrees that in case of any dispute, the claim and/or disputes will be referred to arbitration as per the Rules, Bye-laws and Regulations of the Stock Exchange where the trade is executed and the circulars/notices issued there under as may be in force from time to time.
  • As a SEBI registered stock broker, we are permitted to act as an adviser. This product is part of our advisory activity.

Schedule I

Fees Structure
Nature of FeesFees
Basket FeesINR 300 per basket + GST (Charged upfront)
Advisory Fees (Second year onwards)2% p.a+ GST (Charged upfront on Basket Value)
Approx Transaction Charges0.13%
Note: In Basket fees and Management Fees, GST will be recovered at the applicable rate.
Transaction charges includes Brokerage, STT, Stock Exchange charges, Stamp duty, SEBI Charges & GST

Fees Structure Example:

Suppose Client A has bought 1 basket for 36 months so he will pay INR 300 per basket as Basket fees for 36 months and from 13th month onwards he will pay Advisory fees for 1st basket as one year ends for the basket. So, after completion of one year the client A has to pay the Basket fees (13th month fresh basket) as well advisory fees (1st basket upfront Advisory fees for second year).

Transaction Charges Includes
HeadsRate
STT (Central Govt)0.1% on Transaction Value
Transaction Charges (Stock Exchange)0.0034% on Transaction Value
Stamp Duty & SEBI Charges0.011% on Transaction Value
GST18% on Transaction Charges.
  • I have understood that Investment in securities market is subject to market risk, read all the related documents carefully before investing. Past performance is not indicative of future performance and future results. The recommendations made by ACMIIL could be those that are based on its own research or on the advice of a SEBI registered Investment Adviser.
  • I have understood the equity basket fees terms and other financial conditions and the clarifications required by me. I understand that the investment in Equity basket is subject to risk associated with equity investments. I have understood the investment process and other aspects of the product.
  • I hereby agree to participate.

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