1. Overview
The foreign exchange market (also known as Forex, FX, or currency market) is a global, worldwide decentralized financial market for trading currencies. The primary purpose of the foreign exchange is to assist international trade and investment, by allowing businesses to convert one currency to another currency. For example, it permits an Indian business to import goods from any vendor in United States and pay US Dollars, even though the business income is in Indian Rupees. In a typical foreign exchange transaction, a party purchases a quantity of one currency by paying a quantity of another currency.

Currency trading has been fascinating people for long in India but there was no regular structure through which they could have participated in this exciting asset class. There was the option of currency forwards which was only open for importers and exporters as they used to approach banks for their requirements of foreign exchange. The retail investor was always deprived of the benefits offered by the currency market which is the largest segment of the Global financial markets.

However, after recommendations of a standing committee appointed by RBI & SEBI jointly, currency trading was permitted and Stock exchanges were given permission to introduce currency derivative instruments. The Indian Financial market witnessed the introduction of Currency Futures Trading on Exchange platform from the year 2008. Some time has passed since then and this new segment has generated a lot of interest during this small period. The volumes have sky-rocketed to above Rs. 70,000 crore a day in August 2011 from the meagre start of less than 250 crore when they started trading. Lot of investors and corporate have joined the trading in currency which is providing strength to market. Experts believe that volumes in currency segment could overtake those of Equity segment in coming years.

2. Why is Foreign Exchange market so unique?
The foreign exchange market is unique because of

• • its huge trading volume representing the largest asset class in the world leading to high liquidity;
• • its geographical dispersion;
• • its continuous operation: 24 hours a day except weekends, i.e. trading from 20:15 GMT on Sunday until 22:00 GMT Friday;
• • the variety of factors that affect exchange rates;
• • the low margins of relative profit compared with other markets of fixed income; and
• • the use of leverage to enhance profit and loss margins and with respect to account size.

3. Why to trade in Currency Derivatives market?
Currency derivatives trading do provide various benefits to the participants and has been widely successful due to that. Some of the key reasons to trade in this segment are as under:-

Hedging against Exchange Rate Risk – All those market participants who are exposed to exchange rate risk (like exporters, importers, people having investments abroad) are the biggest beneficiaries of currency derivatives as they can now easily hedge their receivables / payables exposure through the exchange traded derivatives. By hedging, they can protect their business income / investments from being affected by the volatile price movements of various currencies.

Volatility – Traders like the currency markets due to the volatility inherent here as they get immense opportunities to make easy entry and exits out of the position. The volatility makes it a favourite among the traders and reduces the impact cost.

High Leverage – Currency derivatives attract the lowest margins among all other forms of derivatives which further increases its appeal as the returns on investment become much more attractive with lower investment required. In India, the margin required is maximum 5% while the margin generally charged by the exchanges is 3%, which is quite less than those of equity and commodity derivatives.

Universal appeal – The universal appeal of Currency need not be explained as it is the largest asset class that is traded on financial exchanges. The worldwide volumes of currency surpass those of commodity and equity combined together and that attracts market participants to be part of this exciting opportunity.

Portfolio Diversification – A well known proverb highlights the benefit of diversification by stating that "don't put all your eggs in one basket." Diversification of portfolio means reducing risk by investing in a variety of assets. If one asset class does not perform well, the other asset class may provide good returns or at least better returns than other asset class; thereby balancing the portfolio and reducing the risk. Hence, an investor can reduce his risk by allotting some portion of his portfolio to currency derivatives.

4. Available products
In India, everyone used to remain fascinated by the foreign currency but individuals had no means to participate in this exciting asset class. No investment or trading methods were available and foreign exchange was only used as a medium for making payments for imported goods or for receiving payments for exports. This activity too was majorly confined to corporate and had almost negligible participation of individuals.

But things changed after the year 2008, when participation in foreign exchange market was allowed through the route of exchange traded derivatives under the guidance of RBI & SEBI. Initially only futures trading in USDINR was permitted but the huge response and volumes witnessed by the product led to introduction of new currency pairs for trading. Later, even options trading in USDINR has been given nod by the authorities and it is likely that there would be more currency pairs coming soon of exchanges platform. Currently, trading is allowed by the Indian stock exchanges and regulators in the following currency pairs:

Currency	Price Unit	Lot Size	Tick Size	Profit / Loss per Rupee movement
USDINR	Rs. per USD	1000 USD	INR 0.0025	1000
EURINR	Rs. per EUR	1000 EUR	INR 0.0025	1000
GBPINR	Rs. per GBP	1000 GBP	INR 0.0025	1000
JPYINR	Rs. per 100 JPY	100000 JPY	INR 0.0025	1000

For detailed product information or contract specification, visit:

MCX-SX - www.mcx-sx.com
NSE - www.nseindia.com

5. Strengths of Almondz
Almondz strives for providing the best services to our clients and we try to ensure that the customer expectations are duly met. Our team comprises of professionals who have rich experience in currency derivatives market and they try to come up with customized solutions depending on the requirements of clients. Our strength lies in the following:-

• a. Tailor-made hedging solutions
• b. Integrity & honesty in all dealings
• c. Personalized service at all levels
• d. Pan India network
• e. Online & Offline trading available
• f. Online back-office software
• g. Centralised helpdesk
• h. Efficient grievance redressal system
• i. Real-time risk management
• j. Emphasis on training and development of client