Query on Currency derivatives trading post 04 April 2024 in view of RBI circular dated 05 Jan 2024

F&O
41

But how could we know about it without any notification from broker

42

I can understand you defending Zerodha, and to a large extent you would be right too. But please don’t defend the RBI here. Even if they had this stance from 2014, traders are totally unaware of it when we enter positions (No broker messages/nudges, Exchanges happily allowing the trades and charging their fee, and RBI and SEBI chilling knowing that many ppl are committing this “heinous crime” of trading currencies)

Any responsible body (like the RBI should be), will do the following -

  1. Let option contracts go till expiry without any changes. Reason - option sellers have a lot to lose but option buyers don’t. So this prompts only sellers to panic square off at unreasonably high prices (Like its happening right now)
  2. Be as rigid as possible in futures. Reason - Both future buyers and sellers have the same risk reward. So panic will be the same both side and prices wont shoot up/crash down (Like its happening right now)

Surely, RBI can wait for 3 more months to close option contracts honorably, given that they have already waited 10 years!!

6 Likes
43

Now we can do nothing. Already booked a huge loss

1 Like
44

Already margin call pushed out many folks.
RBI is the biggest headache for doing any sort of business.

2 Likes
45

Yes. The derivatives contracts that we enter have a clear understanding that the market price will/will-not be cross the strike price until the specified expiry date. Then how can we violate the expiry date and close the options before the expiry date. Wait till the expiry date. See if the strike price has/has-not crossed the strike price and settle contracts with the difference. Why are we closing the contracts on any random date? Let them close on the expiry dates

3 Likes
46

@VenuMadhav
can you please clarify the meaning of underlying exposure to currencies?

1 Like
47

I have just submittted the form.
But very disappointed both with RBI and Zerodha.
Both of you seemingly have taken retail traders for a ride.

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48

@VenuMadhav Are ESOPs received from a US-based company eligible as evidence of underlying exposure?

49

Shall i book loss ! it took almost my 8months of profit now

50

This is really a blow. I have multiple Iron Condors, it is going to be a nightmare because if I close one leg, there is no gurantee I will be able to close other legs at a favourable price as premiums are running haywire every minute

1 Like
51

Same here.

52

Should we book out at loss now or is there any chance the spikes will be normalized again?

53

Trying to get an expert to answer queries on this thread. Please give us sometime. No one seems to have full clarity :frowning:

2 Likes
54

I have exposure to INR as I have money in my Indian Bank account.
I want to hedge that exposure by buying USDINR as I believe INR will depreciate against USD.
So I can hold the USDINR long position ?

11 Likes
55

Why the circuit limit for options did’t limit this crazy spike?
Can anyone explain?

1 Like
56

What suits your boat doesnt suit the brokers boat. Simple!

57

@VenuMadhav will selling a call option by retail investor be considered a hedge ?

58

Zerodha should get someone from RBI to work here as a trainer and let retail traders be trained in dos/don’ts. I am sure after this grilling and unpractical exercise RBI would come to a better understanding.

1 Like
59

Hi,

The way I interpret the Annexure and the form given by Zerodha, one can go ahead and sign the form, if there is any evidence of exposure to currency fluctuations. In that case, even a long term portfolio of equity investments (either in Nifty via ETFs or companies directly via shares) should be reasonable evidence of exposure. Since I have that (and the investments combined are bigger than the exposure into currency markets), can I go ahead and sign the declaration to keep my positions open?

Asking cause I would prefer to keep them open till expiry, so that the premiums are a better reflection of the spot, and I wouldn’t take an unnecessary loss.

If not that, request Zerodha to do as other brokers are doing, and allowing square-offs with no additional positions to be taken. Please clarify

1 Like
60

I run a software development company as partner in a LLP where we do get USD and GBP every month. I have traded USDINR in my personal capacity for April month no aware of the RBI circular and got to know about it just today. Am I allowed to fill in this exposure form to continue my position?

1 Like