What are currency derivatives, and how to trade them on Cubeplus?

Q: What are Currency Derivatives?

A: Currency derivatives are financial contracts traded on exchanges, similar to stock F&O. However, instead of stocks, these contracts involve currency pairs such as USDINR, EURINR, JPYINR, or GBPINR. The lot size, which represents the standardized quantity of currency units, varies for each pair and can be found on the NSE website (WEB).

Q: What is Lot Size in Currency Contracts on NSE?

A: Lot size in currency contracts on the National Stock Exchange of India (NSE) signifies the minimum amount of a specific currency eligible for trading in a single transaction. For Tradejini, the lot sizes are as follows:

USDINR: 1 unit denotes 1000 $ (Dollar)

EURINR: 1 unit denotes 1000 € (Euro)

GBPINR: 1 unit denotes 1000 £ (Pound sterling)

JPYINR: 1 unit denotes 100,000 ¥ (Yen)

Q: How do I Trade Currency F&O on Tradejini’s Cubeplus?

A: To trade currency F&O on Cubeplus, simply add the contracts to your marketwatch. Type the name of the currency pair in the universal search, and all the contracts will be displayed in the drop-down. Hover over the contract to be traded and click or tap on Buy or Sell to place an order.

Q: Can I use Intraday (MIS) for Currency Futures on Tradejini?

A: Yes, Intraday (MIS) is allowed for currency futures on Cubeplus. However, please note that it’s not allowed for currency option contracts.

Q: How are Currency Derivative Contracts Settled on Tradejini?

A: Currency derivative contracts on Cubeplus are settled at the RBI reference rate.

Example Scenario:

Suppose we take the USD-INR currency pair with a lot size of 1,000. To buy or sell USD-INR contracts, traders must transact in multiples of 1,000 units. If a trader buys one lot, they would be purchasing 1,000 units of the U.S. Dollar against the Indian Rupee. Likewise, if a trader sells one lot, they would be selling 1,000 units of the U.S. Dollar against the Indian Rupee.