Xchange
This query is : Resolved
25 May 2014
How Can One sell what he actually doesnt own...??I hv dis ques.in regard of Futures??
25 May 2014
to understand this, first understand the concept of Forwards through a small example:
lets say Divya has made an export sale and is expecting to receive USD 2000 in July end. Now today INR-USD is 60 but she expects that once new govt comes, rupee will appreciate and be around 55 in July end. Now if it happens, you will lose Rs 5 per dollar resulting in overall loss of Rs 10000.
So Divya goes and enter into a contract to sell USD 2000 to a bank on 31 July 2014 at INR-USD 60. This helps her in safeguarding from any possible appreciation of Rupee. at july end she will receive USD 2000 from her client and exchange it with the Bank at Rs 60 per dollar.
What you are referring to as selling without owning is this contract Divya signed above with the bank. It is a contract to sell on a future date.
In futures, though there is no need for actual delivery. You settle the transaction in cash. So if you get into a futures sell contract for USD 2000, on the expiry date you just settle in differential amount. If INR-UDS on that day is USD 55, then you get Rs per dollar...if INR-USD is 61, you pay Rs 1 per dollar.
lets say Divya has made an export sale and is expecting to receive USD 2000 in July end. Now today INR-USD is 60 but she expects that once new govt comes, rupee will appreciate and be around 55 in July end. Now if it happens, you will lose Rs 5 per dollar resulting in overall loss of Rs 10000.
So Divya goes and enter into a contract to sell USD 2000 to a bank on 31 July 2014 at INR-USD 60. This helps her in safeguarding from any possible appreciation of Rupee. at july end she will receive USD 2000 from her client and exchange it with the Bank at Rs 60 per dollar.
What you are referring to as selling without owning is this contract Divya signed above with the bank. It is a contract to sell on a future date.
In futures, though there is no need for actual delivery. You settle the transaction in cash. So if you get into a futures sell contract for USD 2000, on the expiry date you just settle in differential amount. If INR-UDS on that day is USD 55, then you get Rs per dollar...if INR-USD is 61, you pay Rs 1 per dollar.
31 May 2014
at present as per sebi guidelines
one person have shares then shares sell through trading a/c of the same person due to this account like with the PAN.
one person have shares then shares sell through trading a/c of the same person due to this account like with the PAN.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Unanswered Queries
- Current Account Opening for Sole Proprietorship with Udyam Certificate - Zero Turnover
- Opting our of sec 44AD
- INTEREST APPLICABLE ON ITC REVERSAL PORTION
- TDS on Purchase of Immovable Property by NRI from NRI
- Capital gain from sale of house property
- Transporter Declaration form
- Copyright software
- Multiple trade mark
- Regarding TDS Applicability For Director Remuneration
- Value of property in capital gain
- GST Treatment of Insurance Commission for Existing GST Holder
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
- Address Change to another state of a Registered Trust with 12AB approval
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
