Stock Market · Currency, Commodity & GSec

Currency futures trading

Currency futures allow you to trade the future exchange rate between two currencies. In India, you can trade USD/INR, EUR/INR, GBP/INR, and JPY/INR pairs on NSE and BSE.

Contract specifications (USD/INR)

• Lot size: $1,000 per contract
• Quotation: Rupees per dollar (e.g., 83.50)
• Settlement: cash settled in INR
• Expiry: last working day of each month
• Trading hours: 9 AM to 5 PM (Indian market hours follow RBI guidelines)

Who trades currency futures?

• Importers: hedge against Rupee depreciation (they owe USD in future)
• Exporters: hedge against Rupee appreciation (they'll receive USD in future)
• Speculators: take views on RBI policy, US Fed, global risk events

Example, speculative trade

You expect USD/INR to rise (Rupee to weaken) before the US Fed rate decision.

Buy 10 lots of USD/INR futures at 83.50.

If rate moves to 84.00, profit = ₹0.50 × $1,000 × 10 = ₹5,000.

> Currency futures are highly leveraged. A 50 paise move on 10 lots = ₹5,000 gain or loss. Margin is typically ₹1,500-2,000 per lot.

Tax treatment

Currency futures P&L is treated as non-speculative business income. Same as F&O. Taxed at slab rates. Losses can be carried forward 8 years.

Takeaway. Currency futures trade the future INR/USD rate. Lot size = $1,000. Used by importers/exporters for hedging and speculators for directional bets on RBI/Fed policy. Taxed like F&O, non-speculative business income.