On 13th March, On grounds of Brexit, GBPUSD buying was a trade with a high probability of success. Then how to buy GBPUSD in Indian Market?
It is easy.
Buy GBPINR .
Short USDINR .
It literally translates into - GBPUSD buy.
Here is easy math to do this on the head -
GBPINR buy + USDINR sell
= GBP - INR - (USD - INR )
= GBP - INR - USD + INR
= GBP - USD
= GBPUSD buy
Image before the trade -
Image after the trade -
There is one more magical fact here - There is no COC as it is being negated by the effect of Buying a future and Shorting another one.
See you on the other side!
Go to this link, and you will find all the information about trading of Cross currency pairs on NSE
This is the first circular of SEBI https://www.sebi.gov.in/sebi_data/attachdocs/1457523461184.pdf.
Then it started on Feb 27th. But here is the trick - https://drive.google.com/file/d/0B7GXLnhnGk_JU0E5YjlWMDd4OTJObmdnZ3hoYXRIcTB5d1Fn/view
Here is what Nitin said, "We haven’t yet enabled trading in cross currency. There are some settlement issues around this. MTM is done based on RBI daily reference rate for USDINR which is announced at 12 noon. But market trades till 7pm, when USDINR could have changed. Risk for us as a brokerage firm. Also there are trade process issues. Currently only prop trading firms are taking part. Hopefully exchange clarifies on the working and we will be able to offer this."
So, it is NO NO for retailers.
The way I trade using XM and 1:500 leverage is still under FMCA Act and will be a non-bailable offence.
Even if you managed to buy GBPUSD futures in prop firm, You will be prone to huge COC in cross-currency derivatives! Sell USDINR and Buy GBPINR will always have an arbitration profit.