Why participate in Currency Derivatives Markets?

1. Trading Opportunities

For an F&O trader, volatility in currencies offers a great opportunity to capture tick by tick price movements or take positions based on short term view keeping in mind the fundamentals that influence the price parity between different currencies. Currency trading is an ideal way to diversify one’s F&O portfolio as it is affected by factors different from those that influence Equities and Commodities.

2. Hedging and Risk Management through Currency Derivatives.

Like most other financial tools, currency prices are highly volatile as it is affected by various economic & political factors. But the most important ones are interest rates, international trades, inflation & political stability. Government through central bank intervention can participate in foreign exchange market to influence the value of their currencies. In order to create impact, they either flood the market with their domestic currency to lower the price or buy to raise the price. Currency Futures is the most suitable platform for Importers, Exporters, and & Manufacturer for their hedging needs in currency exposures. Moreover, speculators are the most active players due to the fascinating volume, volatility and varied global factors which influence the currency fluctuations.