Bonanza Portfolio Ltd. has always been the forerunner in initiating any new financial product and have launched trading facilities on the Currency Derivatives Segment for our clients at all three Exchanges namely NSE, BSE & MCX-SX. Thus, we bring to you a new trading segment which brings you Foreign Currency & Interest Rate Futures Trading. These asset classes, where the participation was earlier limited to Banks, Currency brokers, Licensed Money Changers, Corporates and Multinational Companies, are now available at your convenience at your finger tips.
Exchange Traded Currency Derivatives
In order to upgrade Indian Foreign Markets in line with International standards, a well developed foreign exchange derivative market place having strict governance and transparency was inevitable.
With a view to enable entities to manage risk due to volatility in the currency market, the Internal Working Group of RBI explored the advantages of introducing currency futures and submitted the Report of the Internal Working Group in April 2008, which recommended the introduction of Exchange Traded Currency Futures. Bonanza offers you these services so that you can trade in the latest market offerings at your comfort and convenience.
Presently USD / INR futures are available for trading on NSE / MCX-SX / BSE.
Exchange Traded Interest Rate Derivatives
Interest Rate Futures are contractual agreements to buy or sell underlying interest bearing instruments on a specific future date at a pre-determined price. Exchange Traded Interest Rate Futures (ETIRF) are standardized interest rate contracts traded on the exchange.
The trading in Interest Rate Futures was launched on the National Stock Exchange of India (NSE) on 31st August 2009 and will be launched shortly on MCX Stock Exchange (MCX-SX) and Bombay Stock Exchange (BSE).
The increase and decrease in demand and supply dynamics of fund requirement which principally influence IRF rate. The factors like inflation, political and economic scenarios Globally India. There are a number of forces that must be taken into account when attempting to evaluate the current and future movement of interest rates.
Economy:When the economy is growing, consumers have jobs and savings to lend through banks, but they must also borrow for large. As the demand for funds increases, interest rates rise and act as a ration for the funds available. The opposite is also true; when the demand for funds is low, interest rates fall.
Inflationary / Recessionary pressures: will also affect interest rates, because the rates paid on most loans are fixed in the loan contract.
Government Action: The actions of the government have an effect on interest rates as well, because it is the nation’s largest borrower. In the Indian context Reserve Bank of India regulates the Interest Rate. Any changes in financial, economic or banking policies initiates.
International forces: play an important role in influencing interest rates. To the extent that foreign investors are willing to lend money, they supplement domestic sources of funds in the marketplace, driving interest rates down.
Fluctuation in US Dollar:The dollar is the main currency in international trade and is used extensively in world markets. Orderly fluctuations of the dollar in foreign exchange markets are essential for domestic and international stability. Major or very volatile exchange rate movements could force the Central Bank to act, as well as affect interest rates and the county’s monetary policy.
Changes Major Economies: Changes in the condition of the Major Economies will also have a significant effect on interest rates. If any large financial institution is threatened with collapse, it would not default on the funds which are owed to its depositors.
Exporters, Importers & Money Changers
Individuals / HNI’s investors
Borrower, FCY Loans, Corporate
Commodity, Jewelers, Diamond & Bullion Traders
Petroleum Product Traders
Banks & Financial Institutions
Professionals receiving remuneration in foreign currency
Investors investing in assets exposed to currency risk
(B) View Based Traders
Currency futures provide investors / traders an efficient platform to observe the movement of local currency (INR) against other currency (USD) and trade.
Currency Futures provides opportunity for Arbitrage Trading by taking advantage of price difference of the same or similar product between two or more markets by striking a combination of matching deals and capitalize upon the imbalance without any additional market risk.
|Underlying||10YGS7 (10-Year Notional Coupon-bearing GoI security)|
|Notional Coupon||7% with semi-annual compounding.|
|Trading Hours||9 a.m. to 5 p.m. (Monday to Friday excluding gazette holidays) or revision thereof on account of sun outage.|
|Size of the contract||INR 2 lacks|
|Quotation||Quoted in rupee up to 4 decimal points|
|Tick Size||The tick size of Rs. 0.0025 or 0.25 Paisa.|
|Price Circuit Limits||+/-5 % of daily settlement price|
|Available contracts||The Contract Cycle would consist of fixed quarterly contracts for entire year expiring in March – June – September and December|
|Tenure of Contract||will have a maximum of 12 month expiration cycle|
|Daily Settlement Price (DSP)||Last half an hour volume weighted average price (VWAP) of the future contract. In absence of last half an hour trading, the theoretical price as determined by the exchange would be the daily settlement price.|
|Daily Mark To Market||The daily mark-to-market settlement calculated based on the DSP shall be done on T+1 day.|
|Mode of Final Settlement||Physically settled by delivery of deliverable grade securities.|
|Deliverable Grade Securities (DGS)||GoI securities maturing at least 8 years but not more than 12 years from the first day of the delivery month with Minimum total outstanding stock of Rs 10,000 Crore. (List given below)|
|Invoice Price of DGS||Futures daily settlement price multiplied by the conversion factor plus accrued interest|
|Conversion Factor||The conversion factor for deliverable grade security shall be equal to the price of the security (per rupee of the principal), on the first day (calendar day) of the delivery month, to yield 7% with semiannual compounding. Given for each DGS in the list below)|
|Contract Settlement Price||Last half an hour volume weighted average price of the future contract (VWAP) at the normal market closing time on the expiry day|
|Last Trading Day/ Expiry Day for a contract||The trading in the current month contract will be ceased on the expiry day which is 7 days prior to the last business day of the expiry month (assuming both the days are trading days) at the normal market closing time on the expiry day.|
|Final settlement day||The final settlement day shall generally be the T+2 day from the expiry day of the contract.|
|Sr No||ISIN||Nomenclature||Date of maturity||Conversion Factor|
|1||IN0020020163||6.25% 2018 (conv)||2-Jan-18||0.9546|
|4||IN0019980286||12.60 % 2018||23-Nov-18||1.3616|
|5||IN0020030097||5.64 % 2019||2-Jan-19||0.9103|
|6||IN0020080068||6.05% GS 2019 (FEB)||2-Feb-19||0.9373|
|7||IN0020030048||6.05% 2019 (con)||12-Jun-19||0.9349|
|9||IN0020020171||6.35% 2020 (con)||2-Jan-20||0.9538|
Deliverable basket and conversion factor for March 2010 contract
|Sr No||ISIN||Nomenclature||Date of maturity||Conversion Factor|
|1||IN0020080019||8.24% 2018 (conv)||22-Apr-18||1.075|
|2||IN0020030063||5.69 % 2018(conv)||25-Sep-18||0.9171|
|3||IN0019980286||12.60 % 2018||23-Nov-18||1.3542|
|4||IN0020030097||5.64 % 2019||2-Jan-19||0.912|
|5||IN0020080068||6.05% GS 2019 (FEB)||2-Feb-19||0.9385|
|6||IN0020030048||6.05% 2019 (con)||12-Jun-19||0.936|
|8||IN0020020171||6.35% 2020 (con)||2-Jan-20||0.9545|
|11||IN0020060037||8.20 % 2022||15-Feb-22||1.0949|
SEBI Circular CIR/MIRSD/64/2016 Dated 12th July, 2016 - Subject: Simplification of Account Opening Kit - KYC standard documents
Guidance Note - Do's and Don't For Trading On the Trading on the Exchange For Investors
Rights & Obligations including additional rights & obligations in case of internet wireless
Rights and Obligations of beneficial owner and depository participant asprescribed by SEBI and depositories