Currency Exchange Products & Service

Currency Derivatives are very efficient risk management instruments and you can derive the below benefits:

• Hedging: You can protect your foreign exchange exposure in business and hedge potential losses by taking appropriate positions in the same. For e.g. If you are an importer, and have USD payments to make at a future date, you can hedge your foreign exchange exposure by buying USDINR and fixing your pay out rate today. You would hedge if you were of the view that USDINR was going to depreciate. Similarly it would give hedging opportunities to exporters to hedge their future receivables, borrowers to hedge foreign currency loans for interest and principal payments, Resident Indians, who can hedge their offshore investments.
• Speculation: You can speculate on the short term movement of the markets by using Currency Futures. For e.g. If you expect oil prices to rise and impact India's import bill, you may buy USDINR FUTURES in expectation that the INR would depreciate. Alternatively, if you believe that strong exports from the IT sector, combined with strong FII flows will translate to INR appreciation, then you may sell USDINR FUTURES
• Arbitrage: You can make profits by taking advantage of the exchange rates of the currency in different markets and different exchanges.
• Leverage: You can trade in the currency derivatives by just paying a % value called the margin amount instead of the full traded value.

All Resident Indians as defined in section 2(v) of the Foreign Exchange Management Act, 1999 (FEMA, Act 42 of 1999) are eligible to trade in the Currency Derivatives segment.. Currently, trading facility in Currency Derivatives at I-Sec is offered to all Resident Individuals / HUFs / eligible Corporates fulfilling the FEMA criteria.

• (a) Existing Customers: No, if you are an existing customer and your ICICI bank account is more than 6 months old then you can activate your account for Currency Derivatives Segment online by accepting the Online Terms and Conditions for Currency Derivative. If you have linked other bank account, then you need to submit prescribed document for activation.
• If your linked ICICI Bank Account is not more than 6 months old you can activate your account for Currency Derivative Segment by submitting the prescribed documentation. To apply for Currency Derivatives please contact customer care at 24-hour Customer Care Number or you can also write to us at helpdesk@icicidirect.com We will be glad to assist you further.
• (b) New Customers: Yes, all new customers need to open a trading account and then activate their currency derivatives segment by selecting T&Cs and providing prescribed document for activation of Derivatives segment. For further information, please feel free to contact any of our 24-hour Customer Care Number. you may also write to us at helpdesk@icicidirect.com We will be glad to assist you further.

Once you are registered for Currency Derivatives after completing the below steps:

• Login into your account with your user id and password
• Accept the online "Currency Derivatives Terms and Conditions"
• Allocate funds from Modify Allocation link for Currency Derivatives segment

Trading in Currency Derivatives through www.icicidirect.com is allowed during the exchange specified timings. Currently, the trading hours at NSE for Currency Derivatives are between 9:00 am to 05:00 pm, from Monday to Friday. The Exchange may alter the trading hours on any day for any reason that the Exchange may deem fit.

I-Sec enables currencies for trading in the Currency Futures and Option segments. Only those currencies which are allowed by the exchanges are made available by I-Sec for currency Futures and Options trading. Currently, both in FUTURES and OPTIONS, all INR pairs (USDINR, EURINR, GBPINR, JPYINR) are enabled by I-Sec for trading. However, NSE offers all INR and Cross Currency pairs (GBPUSD, EURUSD, USDJPY) for trading.

Equities Derivatives trading allows you to trade in Stocks and Index. While Currency Derivatives trading allows you to trade in currencies. Settlement in currency derivatives segments is done in cash.

Currency Derivatives contracts expire two working days prior to the last business day (i.e. Last trading day at exchange) of the expiry month 12.30 pm as per RBI ref rate published FBIL

To place Buy/Sell orders in Currency Derivatives, you will have to do the following:

• Visit the "Place Order" page
• Select Futures or Option in the Product bar
• Define the Currency Underlying Code
• Click on "Select the contract". This will display the whole list of contracts available in the given Currency code expiring in different months
• Select the contract in which you wish to trade
• Click on the "Submit" link. This will take you to the buy / sell page.

Initially, margin is blocked at the applicable margin percentage on the order value. For market orders, margin is blocked considering the order price as the last traded price of the contract. On execution of the order, the same is suitably adjusted as per the actual execution price of the market order. The margin is blocked from the available limits under the Currency Limit page.

Yes, margin % can be changed during the life of the contract depending on the volatility in the market. It may so happen that you have taken your position at 4% margin. But later on, due to the increased volatility in the exchange rates, the margin % is increased to 5%. In that scenario, you will have to allocate additional funds to continue with the open position, else such position may come in the MTM loop and get squared off because of insufficient margin. It is advisable to keep higher allocation to safeguard the open positions from being squared off.

Calendar spread means risk off-setting positions in contracts expiring on different dates in the same underlying.

For example, you take Buy position for 2 lots of 2000 qty in FUT-USDINR-27-Aug-2021 at Rs.75 and sell position for 1 lot of 1000 qty in FUT-USDINR-28-Sep-2021 at Rs.775. 1 lot of 1000 qty buy position in FUT-USDINR-27-Aug-2021 and 1 lot of 1000 qty sell position in FUT-USDINR-28-Sep-2021 form a spread against each other and hence are called "Spread Position". This spread position would be levied spread margin % for margin calculation instead of IM%. In this example, the balance 1 lot of 1000 qty buy position in FUT-USDINR-27-Aug-2021 would be non-spread position and would attract initial margin.

I-Sec may, at its discretion, allow Reduced Margin benefits on spread position. I-Sec may allow such benefit for the spread position between Near month and Middle month contracts only.

Contracts will be removed from the spread benefit one working day prior to the expiry of the near month contract.

You can place the square off order either through the normal buy/sell page or through a hyper link "Square off" provided on the "Open Position" page.

Once the Available Margin falls below the Minimum Margin, I-Sec may, at its discretion and at a suitable time, run the Intra-day Mark to Market process. Through this process, the system would block additional margin required out of the Limits available, if any.

In case there are no Limits available, the Intra-day Mark to Market process would cancel all pending orders for the underlying group and if still there is additional margin required, the process would square off the open positions for which Available Margin is below the Minimum Margin and there exists a margin shortfall.

Minimum Margin is the margin amount on a particular position that you should ensure to maintain with I-Sec at all points of time. If the Available Margin with us goes below the required Minimum Margin, the I-Sec system would block additional margin required, if the same is available in Currency Derivative segment.

Available margin is calculated by deducting real time MTM loss from margin blocked and add margin at position level, i.e.

Available Margin = Margin on Positions + Add Margin - MTM Loss

Minimum Margin is calculated by taking MM % instead of IM%. For spread position, spread

Yes, you can always voluntarily Add Margin at the time of placing orders or allocate additional margin, on any open position from the open positions page.

Since the Intra-Day MTM process is triggered when Available Margin is less than the minimum margin required, having adequate margins can avoid calls for any additional margin in case the market turns unfavourably volatile with respect to your position.

You can add margin to your position either at the time of placing orders or once the position is created by clicking on "Modify Margin" link and then do Add margin on the "Open Position - Futures" page by specifying the margin amount to be allocated further. However, you should keep in mind that whatever margin you add during the day will remain there only till the end of day mark to Market (EOD MTM) is run or up to the time you square off your position in that underlying group completely, whichever is earlier Next day if you want some more margin to be added towards the same open position, you will have to do a 'Add Margin' again.

Assuming you place a transaction on day T, Options obligation will be settled as per the following table.

Yes. You can place Currency Derivative orders through our Call Centre by using the Call N Trade facility.

At ICICI Securities, Currency Futures and Options brokerage is Rs. 20 per executed order only.

You can have following two Settlement obligations in Currency futures market:

Daily settlement obligations arise due to the following:

• Pay-out/Pay-in due to Profit and loss on squared off position
• Pay-out/Pay-in due to Profit and loss on EOD MTM of open position
• Pay-in due to Brokerage and applicable taxes

• Pay-out/Pay-in due to Profit and loss on close out
• Pay-in due to Brokerage and applicable taxes.  

• Brokerage: Any Transaction you enter into will attract brokerage. Brokerage is debited to your account at the end of the day.
• Premium payable or Receivable
• Profit on Exercise
• Loss on assignment

You can view your obligations on the "Cash Projections" page. The date on which amount is debited from your account or deposited in your account could be checked from the 'Cash Projection' page. You can even see the historical obligation (already settled) by giving the respective transaction date.

All Currency Futures Daily obligations are settled by exchange on T+1 basis and Final settlement obligations are settled by exchange on T+2 basis.

Daily Settlement Obligations at I-Sec: This means that any daily obligation arising out of transactions in Futures or EOD MTM on day (T) is settled on the immediate next trading day. This further means that if you have a debit obligation at day (T), the payment will have to be made on day (T) itself. Whereas, if you have a credit obligation, amount would be credited in your account on T+1 day. If T+1 day is a holiday, credit would be given to your account on the next working day.

Final Settlement Obligations at I-Sec: Your final settlement obligation would be settled in the same manner as the daily obligations except that your credit obligation will be credited to your account on T+2 day or on a subsequent working day, if T+2 is a holiday.