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Seminar on “Exchange Traded Currency Derivatives in India”

Date:17th December 2010
Speaker:Mr. Sebastin A, CFA
Designation: Vice President, MCX India Limited

An evening seminar was organized on the topic “Exchange Traded Currency Derivatives in India” at Chennai.  Mr. Sebastin A, CFA, is working as Vice President with M/s. Multi Commodity Stock Exchange India Ltd, was invited as a Speaker.

Mr. Sebastin started the seminar with a brief on the evolution of Currency Futures. He briefed on the FX market and its development in India. Briefing on the FX flows in India and growth, he listed on factors affecting the Exchange Rates.  He Presented the Introduction of Currency Future Market and types of Derivatives available in the Market.

He also briefed on Currency Futures contract specifications and its benefits and applications.  Presenting an example, he explained how Currency Derivatives can be utilized to reduce the cost of handling future inflow/outflow of Foreign Currency.  He explained on positive impact Currency Derivatives Trading has on Indian Financial Market.

Mr. Sebastin, explained on how Currency Derivatives can be used to minimize the risk of investment in equity by way of Hedging and in Arbitraging.

Discussing on the risk attached in Currency Derivatives Trading he stated that the margin requirement is highly minimal. He spoke about the minimum requirements, margins and daily settlement practice in Currency Derivatives Trading.  He presented a graph showing correlation between various major Traded Currency Derivatives across the globe.  He explained about option pricing model which can be substituted to Currency Derivatives to restrict abnormal loss.  He presented a list of major disaster which happened in the currency derivative market in India and abroad.  He concluded the session explaining the Tax implication and Accounting guidelines which should be kept in mind while trading in Currency Derivatives.