OBJECTIVES OF THE STUDY

The basic idea behind undertaking Currency Derivatives project to gain

knowledge about currency future market.

To study the basic concept of Currency future

To study the exchange traded currency future

To understand the practical considerations and ways of considering currency future

orice.

To analyze different currency derivatives products. FINDINGS

Cost of carry model and Interest rate parity model are useful tools to find outI

standard future price and also useful for comparing standard with actual futurel

price. And it's also a very help full in Arbitraging.

New concept of Exchange traded currency future trading is regulated by

higher authonity and regulatory. The whole function of Exchange traded

currency future is regulated by SEBI/RBI, and they established rules and.

regulation so there is very safe trading is emerged and counter party risk is

minimized in currency Future trading. And also time reduced in Clearing and

Settlement process up to T+1 day's basis.

Larger exporter and importer has continued to deal in the OTC counter even

exchange traded currency future is available in markets because,

There is a limit of USD 100 million on open interest applicable to trading

member who are banks. And the USD 25 million limit for other trading.

members so larger exporter and importer might continue to deal in the OTC

market where there is no limit on hedges.

In India RBI and SEBI has restricted other currency derivatives excep

Currency future, at this time if any person wants to use other instrument of

currency derivatives in this case he has to use OTC. SUGGESTIONS

Currency Future need to change some restriction it imposed such as cut

off limit of 5 million USD, Ban on NRI's and FI's and Mutual Funds from

Participating .
Now in exchange traded currency future segment only one pair USD-INR.

is available to trade so there is also one more demand by the exporters

and importers to introduce another pair in currency trading. Like POUND-

INR, CAD-INR etc.

In OTC there is no limit for trader to buy or short Currency futures so there

demand arises that in Exchange traded currency future should have

increase limit for Trading Members and also at client level, in result OTC

users will divert to Exchange traded currency Futures.

In India the regulatory of Financial and Securities market (SEBl) has Ban

on other Currency Derivatives except Currency Futures, so this restriction

seem unreasonable to exporters and importers. And according to Indian

financial growth now it's become necessary to introducing other currency

derivatives in Exchange traded currency derivative segment. CONCLUSIONS

By far the most significant event in finance during the past decade has been the

financial derivatives...These

extraordinary development and expansion of

instruments enhances the ability to differentiate risk and allocate it to those investors

most able and willing to take it- a process that has undoubtedly improved national

productivity growth and standards of livings.

The currency future gives the safe and standardized contract to its investors and

individuals who are aware about the forex market or predict the movement of

exchange rate so they will get the right platform for the trading in currency future.

Because of exchange traded future contract and its standardized nature gives

counter party risk minimized.

Iniialy only NSE had the permission but now BSE and MCX has also started

currency future. It is shows that how currency future covers ground in the compare

of other available derivatives instruments. Not only big businessmen and exporter

and importers use this but individual who are interested and having knowledge about

forex market they can also invest in currency future.

Exchange between USD-INR markets in India is very big and these exchange traded

contract will give more awareness in market and attract the investors. Objective of the project:

To study currency trading.

To study about the usage and utility, hedging and arbitrage in

currency trading.

To study about the factors deciding currency fluctuation.

To study about currency trading in India.

What are the instruments to protect any losses from currency

fluctuation?

To study about the initiatives taken by Indian government for

currency trading.

What are the major participants in currency trading?

To study about currency exchange and currency exchange rates.

To study about hedging in currency trading. Recommendations to the Company

After such observations and some conclusions made on the basis of that I

would like to recommend some important points, upon which company

should focus and try to grow its business by tapping the market through

making new customers. In this recommendation part of this project work I

am suggesting these points.

First thing which I would like to suggest is the company should focus on its pronotionalforces, so that it
would be able to convey the product features to the comnon people. Once .

the features will be exposed then only it can make new customers. Through the survey.

responses we knew that advertisemnents are the most affective medium of creating awareness.

So to differentiate our product and to expose our exclusive benefits we need to take it outin

front of the people.

To create awareness about the product we can take several steps such as:

Arranging various kinds of activities at public gathering.

Placing the customer facilitating desks at various places.

Approach to the various offices to get new leads or customer contacts. Conclusion
During this project work I have tried my best to touch each and every

aspect which would affect the business process of the company.

All exchanges generate impacts in the core functions of price discovery,

offers liquid markets, a central counter party to all but eliminate counter

party risk, market data that is freely and transparently disseminated andfutures markets that are well-
correlated with spot markets to enablel

Only two positive impacts were opposed on the basis of experience in the

featured markets to date- that a currency exchange can enable hedging

against inflation and quality improvements generated by the exchange

can reduce dependence on imports.

The parameters that decide the price of currency in different

exchanges are:

Volume of currency being traded.

Demand and supply forces.

Worldwide demand and supply of a given currency.

The area of facilitating currency is perhaps the area where there Is greatest scope for.

exchanges to learn from each other's experience.

These are the main aspects which could be concluded from the responnses. On the basis ot

these observations some recommendations could be provided to the companies about which I

will be discussing in the next part.

During m training period the work which I have done, has helped me a lot. I understood to

reach any heights you have to start from the scratch. I understand that if you want to be best

in any organization then you have to do your work with full dedication and sincerity.