Ha ah … Thats why it took so long to prepare the doc … They might block my forum account for saying that.
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In futures, both buyers and sellers have same risk reward. In options, buyers have very low risk. So they can ignore this saga and tell themselves, let the exchanges sq off my positions since losses will be so low. Sellers have immense risk.
Thats why, in futures both buyers and sellers panic making underlying non volatile.
In options only sellers panic and run to sq off positions and hence prices skyrocket
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zerodha provide a tool to get underlieng exposer.
Undertaking Derivative contracts is under list of permissible captial account transactions under FEMA.
Please clarify open exsisting positions (Expiring in May’24) can be counted under “Contracted Expousre”
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Futures just follow spot and the volumes are huge in futures as in to create any imbalances and there is no time value risk unlike options.
Aage bhi ku6 bta do bhai?
I think this has to do on regulators, no proper faqs are released, no definitive clarifications are provided, and even now no one knows what constitutes as the underlying exposure.
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So when will Zerodha allow trading in EUR USD, GBP USD, JPY USD contracts for retail traders ? Anytime soon ? or Currency derivative traders have to learn to trade something else ??
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Not just Zerodha, entire broking industry stopped them, looks like until regulators give more clarification on this the trading on currencies won’t be as usual.
Don’t think so this comes under exposure as this contract is on Indian exchanges.
Currency contracts paired against INR has been stopped without exposure. EURUSD, GBPUSD, JPYUSD are allowed by RBI without exposure. So now it is upon zerodha and other similar brokers to allow their futures. RBI has allowed them long back, but no broker has started them. I think its time now.
Infact i think its the best time to introduce EUR,GBP,JPY paired against USD. 80% market that wont be able to trade currency paired against INR , will definately trade it. @nithin Think about it.
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Moving to Motilal and I can do GBP/USD there. Z is not being lucid in its replies.
Till there’s clarity, we will not be allowing. We’ve reached out to subject matter experts to provide clarity on this.
To Sum it Up,
- If declaration is provided, Zerodha will not square off position tomorrow ie., 4th Apr 2024 and allow to carry position till expiry.
- Fresh position will not be allowed to take from tomorrow.
Yes, Volume post 5th may dry up but USD/INR is cash settled, impact will be far better compare to todays standing atleast.
Can somebody pls correct me if my understanding is wrong.
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If declaration is not provided one can’t take new positions but can carry existing positions till expiry.
Current positions can be held until expiry with adequate margins. However, if you don’t have underlying exposure, better to square if off yourself before 05th to avoid being non compliant with RBI rules. Zerodha will not square off your position for you since the onus is on you.
Fresh positions will be allowed provided you give the declaration of exposure.
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Can we buy mutual funds like ICICI Prudential US Bluechip Equity Direct Plan to create such exposure for trading in USDINR
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We’ve asked this to someone who is clued in on this, will update once we hear from them.
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Okay, this provides atleast some clarity that I am not at the mercy of random bid-ask spreads while squaring off tomorrow.
Hopefully better pricing will be available in next couple of days
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