# Query about Currency Derivatives Options

Hi Guys. A little help required please.

I am of the view that Rupee might depreciate in the near term. Spot is 1 USD 64.3616. So if I am over the view that rupee would depreciate so i should buy a call option right?

Further, I was thinking to buy ITM CE of strike 64.25 which is at a premium of Rs 0.385. I just want somebody to correct me if I am thinking this right, 1 lot is 1000usd worth right, So i would have to pay a premium of 1000x0.385 = Rs 385 per lot right?

So If say I invested Rs 5000, total lots I can purchase would be around 13.

So if Rupee depreciate and goes up and premium goes up to 0.435, So is my calculation for profit here correct.
That is 0.435 - 0.385 = 0.05 X 1000 X 13 lots = Rs 650

Did i get it right? and also is currency derivative gives such minimum profits only? Like investing 5000rs and getting 650 rs on a 0.05 paise movement of premium.

Is there any huge volatility observed for a trader to earn a good amount? Or inveting 5000 rs in equity derivative makes more sense?

Today i took 10lots future of usdinr and margin blocked is around 12k… Every 0.005 increment would give Rs5 ( if you have 10 lot at 64.45 then 64.455 would give Rs 50 ( - brokage & tax ) ) !

For options others can help…

kite|281x500

Yep ur calculations right. Getting 650 on 5k investment is like 12% isn’t . I don’t know if you can call it minimum.

But yeah, currency doesn’t usually move as much as equity. Hence the margin requirement is also much lesser if trading futures. If you want volatility, equity is better bet.

Thank you guys.

Minimum tick size is .0025 but yes .005 increment would give x1000 ( contract size) = 5 rs.

But minimum increment will be 2.5 rs per contract per tick movement of USD.