For a lasting and profitable
career in investment, a trader should not keep all his eggs in one basket and diversify
his portfolio in order to minus losses due to inflation. And trading in currency derivatives is the investment
you would like to make in this unpredictable market. And currencies are dealt
through the foreign exchange market, forex trading and is one of the most traded financial markets in the world.
Forex market is where
international capital and flows meet at crossroads. Today however, global
financial and investment flow control trade as the non-speculative source of
forex market volume. The forex market is truly a trader’s market as currencies
are traded round the clock empowering traders to take action on news and events
as soon as they break out. The most interesting thing about trading in forex is
that half-a-billion dollars trade can occur in a matter of minutes and the
movement in prices may not even be noticeable, while a large size of
half-a-billion buying and selling transactions in any other market will result
in radical movement in prices.
In forex the excellent opportunity
to trade in currency derivatives are the form of a contract in between a buyer
and seller, whose value is derived from another underlying asset. Such when a
derivative is based on the foreign exchange it is called as futures contract
which determines the rate at which the given currency is exchanged for another
currency at a given date.
Get benefitted by currency trading
Currency trading will give you
plenty of benefits and they are as follows –
·
It is the new asset class for diversification for
citizens of India. It gives excellent hedging opportunities to:
a)
Gives benefits to importers and exporters, who
can hedge their future payables and receivables.
b)
Additional benefits to borrowers who can hedge
foreign currency (FCY) loans for interest and principle payment.
c)
Excellent opportunity for NRIs to hedge their
offshore investments.
d)
It also gives options to commodity traders in
order to hedge against radical price movements in prices of gold, crude etc.
There are various benefits trading in
forex but you also have to keep in mind that selecting a reputed broker is
equally important and an ideal broker will provide these services to you in
forex trading:-
·
1) A broker will cater to our online and offline
customers who want to trade in currency derivatives, all they have to do is
fill up a simple form. You don’t need to have a separate trading account for
trading in currency derivatives.
·
2) Your cash margin will be used for multiple
purposes like equity and currency transactions as well. The broker will provide online as well as
offline trading facilities on all the stock exchanges. You will get the convenience to place sale or purchase orders through branches, online and over
the phone.
3) With a good broker you will receive knowledge
on products through seminars/con-calls, special commentary and research reports
by a dedicated currency analyst team, always at your service to help you in
decision making.
·
4) A broker will offer updated results on Dollar
INR movement with calls to buy and sell. A good broker
· will provide customized
consultancy services to Exporters, Importers & Corporates for their
transactions in forex.
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