ICICIdirect.com, a part of ICICI Securities, on Wednesday launched its new product for online trading in currency futures.
Online trading in currency derivatives would enhance the suite of instruments available for trading and hedging for investors, the company said in a statement.
“There is a strong need to hedge currency risk in a transparent and a low cost manner,” ICICI Securities Ltd Executive Director Anup Bagchi said.
For the retail customer it will be one more source of diversification of an asset class, secondly active traders will benefit from the low margin requirements and for the Small and Medium Enterprises and corporates there will be an avenue to hedge at a low cost and in a transparent manner, Mr. Bagchi added.
The strong correlation that foreign exchange has to interest rates, equity flows and commodities would translate into opportunities to trade currency futures independently or in conjunction with equities.
Currently, only futures contracts in currency derivatives have been introduced by the National Stock Exchange.
Foreign exchange rates, like any other asset class move depending on various factors like demand supply, interest rate parity, trade and capital flows and speculators taking positions.
ICICIdirect.com is a online trading website with a 1.9 million customers.