Published on Mon, Dec 21, 2009 at 18:05 | Source : CNBC-TV18
Updated at Tue, Dec 22, 2009 at 17:40
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Classroom: Currency Derivatives
In this part of Currency Derivatives, we share insights on some of the basic differences between the spot market and the currency futures market and try to understand the nuances that lie within the Indian currency derivatives.
In this part of Currency Derivatives, we share insights on some of the basic differences between the spot market and the currency futures market and try to understand the nuances that lie within the Indian currency derivatives. So what really is the difference between the spot market and the futures market? Spot market: Spot Fx is the market for on-the-spot delivery and instantaneous settlement of currencies; the timeline for delivery of which is two days. it is highly sensitive to the market conditions and large frequencies of transactions are undertaken on a day-to-day basis. Currency futures market: Currency futures, is exchange of one currency for the other, on a future date, at the rate determined on the present day i.e. the purchase date. It is largely used to hedge the foreign exchange risk and the transaction is closed in a span of 30 days. The minimum trading amount has to be USD 1,000. AV Rajwade, Chairman of AV Rajwade & Company will take us through these fine points. To view the entire discussion, watch videos.
In this part of Currency Derivatives, we share insights on some of the basic differences between the spot market and the currency futures market and try to understand the nuances that lie within the Indian currency derivatives. So what really is the difference between the spot market and the futures market? 
