Rupee factor in cross currency futures
Yes it does. If you are trading EURUSD, all your profit and losses will be in dollars. These dollars have to be converted into Rupees to post debit/credit to your account. This conversion is done based on the RBI reference rate for the USDINR at 12pm on that day.
Thanks for ur promot reply sir, but one doubt,i shorted 10 lot eurusd at 1.17 on a day rbi rate is 68.7, next day i covered them at 1.16, rbi rate is 69, so my profit will be 6900 rs , am i correct,is this calculated in same way or some other method, second when we recieve contract notes about eurusd short , it states 10 lot sell at 80.37, if we go this way about calculation then on next day when incover euro shorts ,there will be very less profit as ruppee has rally , so buying at 80.04, so profit will be only 3300 rs, which method will apply on profit loss and sir last suppose i short euro 1.2 and want to cover it at 1.05 after 1 year but in that time rupee has rally from 64 to 74, whether all profit goes to toss or if after 1 year i cover this position only on last settlemnt date,then whether thing will change?
As on settlemt date , eurinr will be divided by usd inr , and we got euro rate,illustration, eurinr at 79 and ruppe at 74, so we get close to 1.06, my seling cost is 1.16, so on 10 lots profit can be 74000 rs and one more truth though i am zerodha customer i also has samco account because zerodha does not offer cross currency, its better to tell truth sir about 2 account , please help me and guide me,i am reading about zeroda cross currency article but cant get it, i specified questions , now ur answers will clear my whole doubt
How much longer before I can trade cross currencies in zerodha?
How exchange settles this is by doing daily MTM. So all your P&L which will be in dollars in case of EURUSD, gets converted end of day to rupees based on RBI reference rate for USDINR. So indirectly you are also trading the rupee all the time. If rupee appreciates, your dollars will get your lesser rupees. So even if you make money on EURUSD, you can technically lose money because USDINR conversion went against you.
One of the ways to cover this risk is by shorting the USDINR contract when you take the EURUSD trade. This way you will remove the USDINR risk on your trade.
Waiting on some clarifications from the exchange on how P&L etc can be calculated.
Then i am trading these from past 2 months, how will my past transactions cost me?
All transactions would have already been marked to market. I am guessing there won’t be any new charges. Since in the last two months, rupee has depreciated, I am guessing you would have benefited from this.
@nithin. Sir, RBI has handed over the role of releasing reference rates to a private limited corporate entity, Financial Benchmarks India Pvt. Ltd. www.fbil.org
asking clarification from exchanges { nithin told about it in a answer}