A Currency Future, also FX future or foreign exchange future, is a futures contract to exchange one currency for another at a specified date in the future at a price (exchange rate) that is fixed on the purchase date. Typically, one of the currencies is the INDIAN NATIONAL RUPPEE(INR). The price of a future is then in terms of INR per unit of other currency. This can be different from the standard way of quoting in the spot foreign exchange markets. The trade unit of each contract is then a certain amount of other currency, for instance 1000 Units. Most contracts have physical delivery, so for those held at the end of the last trading day, actual payments are made in each currency. However, most contracts are closed out before that. Investors can close out the contract at any time prior to the contract's delivery date.Trading in Currency is the slowest way but the safest & easiest way to earn money. It requires a reasonable amount of speculation.
Trading in INR.
You have to buy a Future Contract of 1000 Units & the margin money is very less. You need to have just 5% of margin money of the entire contract value. For instance, if the dollar rate is say 48.00, then you should have the margin of just Rs.2400 [(48*1000units)*5%].
So, trading in Currency Futures is the investment tool for a comman man who does not carry more speculation activities. Just by keeping the margin money of Rs.2400 you can get the Currency Future worth Rs.48000.
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