Hi can someone give a complete guide on how to trade in currency options like the same way as Banknifty options. I have read there is good margin available in currency trading. Can we form strangles in currency same way as Banknifty. Plus what are the trading hours, how to do it?
The process for trading Currency F&O remains the same. You can learn more about Currency derivatives on Varsity.
Yes, you can trade strategies the same way you do for BANKNIFTY. You can check the margin requirements on margin calculator or on the Kite basket itself.
The trading hours for CDS segment are from 9:00 AM to 5:00 PM. You can check market timings for all segments here.
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Hi thanku for the promp reply, is currency trading legal im India, cause I am getting mixed answers on the same, also does zerodha allow it through current D mat account.
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You can trade what are listed on exchange, why don’t you check on kite. Also demat is only for equity.
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Kartik sir first I ask on trading qna and than based on guidance move ahead. The people here are 100 percent khara sona. .
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To start trading in the currency derivative, you need to open a forex trading account and a bank account. However, before you start trading, there are a few points that you should keep in mind.
● Currency derivatives are contracts that have currency as their underlying asset. Just like every other derivative, currency derivatives are also traders in a future date. These are available in the form of futures, options, swaps and forward contracts. However, futures and options are the most popular ones in the lot.
● Daily turnover of the currency derivative market goes into thousands of crores, but the market is limited to only importers, exporters, corporations and banks.
● Retail investors except NRIs can also trade in currency derivatives to create more wealth or diversify their portfolios. However, for doing so, they need to be well aware of all the intricacies of the forex market, which is quite distinct from the stock market.
There are also a few challenges that traders need to be cognizant of:
o There are only four currency pairs that can be traded in the market – USD, GBP, EURO and Japanese Yen. So, the options are limited, but it’s also beneficial as the trader needs to keep a check only on the five currencies, including the Indian Rupee.
o The timing of the trading market is 9 to 5, making it difficult for traders to capture the liquidity of the Western markets (USD, GBP and EURO).
I hope this answers your question.
@Lakshmi_Jha , just curious to know. Did you just copy - paste it here from some other source ?
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