Currency Derivatives

"Never keep all your eggs in one basket" Financial markets are a classic example of this proverb. These markets all around the world in all categories and at all points of time have taught us to keep our investments diversified into various instruments. Hence, we at Shriram Insight have brought an investment opportunity to further diversify your portfolio – Currency Derivatives. Currency derivatives are a contract between the seller and buyer, whose value is to be derived from the underlying asset, the currency value. A derivative based on currency exchange rates is an agreement that two currencies may be exchanged at a future date at a stipulated rate. For the first time this segment is accessible to the retail players in the currency trading market.

Currency derivatives are a bundle of opportunities for a number of players.

• It is a new asset class for diversification of investments for all resident Indians.
• It gives hedging opportunities.
• Importers and exporters, who can hedge their future payables and receivables,
• Borrowers, who can hedge foreign currency (FCY) loans for interest and principal payments, with the need for proof of documented exposure.
• It gives arbitrage opportunities.
• It gives trading opportunities because of its volatility and multiplicity.
• It provides highly transparent rates to traders as it is exchange-traded.