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Benefits Of Investing In Currency Trading In India

Currency trading is one of the most lucrative investment options for people who love to invest in trading. However, because of a lack of experience, knowledge, and resources, they are unable to participate in Forex markets.

So, what is the currency market?

The currency market involves participants across the globe buying and selling different currencies. Currency trading participants comprise trading with banks, corporations, central banks, investment management firms, hedge funds, retail forex brokers, and investors like you.

Forex trading is a legitimate way to make a profit.

What Is Currency Trading Market In India?

The currency market in India is cash-settled. This means currency trading in India is not physically settled i.e there is no actual delivery of the currency on expiry. When you ask what is currency trading meaning, you are most probably referring to currency futures trading.

Currency futures are traded on platforms offered by exchanges like the NSE, Bombay Stock Exchange, MCX-SX.

Currency trading usually happens from 9.00 am to 5.00 pm. It requires opening a forex trading account with a broker to do trading in the live currency market.

There are potential benefits when you choose to trade in currency trading in India:

Low margin requirements

Currency trading in India lets you buy and sell by keeping only a small percentage of the position. This allows the traders to achieve the optimum rate of return on their deployed capital.

Hedging

The process to protect your existing investment portfolio against future unforeseen losses. This is usually practiced by residents to protect their offshore investments and NRIs to hedge their domestic portfolio. It is also adopted by importers and exporters to limit their losses owing to currency rate fluctuation.

Speculations

To gain from the highs and lows of the currency exchange rates, a trader must know the possible direction. For example, there is a possibility of USD appreciation with crude oil price rises, the trader would buy USD/INR future. Similarly, if there is a possibility of INR appreciation, they would short sell USD/INR futures to make a profit from the movement.

Arbitrage

The currencies are traded on exchanges like NSE and BSE in India. The investors and traders can benefit from the inadequacies in the price from buying low to selling high on different exchanges.

High liquidity

One of the most important criteria to run a business is having enough liquidity, which means converting your assets into cash. Currency trading is the largest market in terms of volume turnover in the world. One can speedily enter and exit huge positions with a single click.

Once an investor/ trader starts participating in the currency market in India, there is no looking back. It is an open market in the world, even when the domestic market closes. With the massive expansion of the decentralized market over the years, millions of traders are working hard every day to grab a piece of their profit. If you are a newbie you must hire currency trading services who can provide their expert knowledge and offer you trade signals. Eventually, you will learn and know the trade strategy to take it further on your own.

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