In a previous article, we covered the topic of ot email list c derivatives and their types, credit and interest rate derivatives. Continuing our coverage of derivatives, today we'll cover currency and commodity derivatives as our next topic. What are currency derivatives? Currency derivatives are defined as future and option contracts that can be bought and sold in a particular quantity of a particular currency pair on a future date (wikipedia). The basis is the exchange rate. It is generally unlisted and thereby traded (over-the-counter) on the otc. In the indian market, currency derivatives are available in four currency pairs: us dollar (usd), euro (eur), british pound (gbp) and japanese yen (jpy). Currency options are currently available in us dollars. Forex (forex) is the simultaneous purchase of one currency and the sale of another.
Forex derivatives are defined as a type of financial derivative whose payoff depends on the exchange rates of two or more currencies. It basically helps to fix future forex rates. It is used to set aside currency risk and transfer liquidity from one currency to email list another. Currency derivatives types of forex derivatives forex swap forex futures contract forex currency swap buy or sell futures various products in the currency derivatives segment trading can be on futures, options, or carry forwards, or during the day depending on when the position is squared. The futures market facilitates the trading of currency futures contracts.
If you can predict future needs or receipts of foreign email list currency, you can set up a forward contract to fix the exchange rate. Currency futures contracts can be used to hedge currency positions and take advantage of expected exchange rate fluctuations. Currency derivative contracts are traded in pairs such as rupee-dollar, rupee-british pound, or rupee-euro. Price fluctuations in currency contracts are linked to the economic indicators of the particular country in which the currency is traded. As a result, trade balances, interest rates, inflation and political risk affect