Amit_Ghosh

How to do Forex Trades in Indian Share Market Legally

Education
FX:GBPUSD   British Pound / U.S. Dollar
Doing Forex trades if the currency pair doesn't have INR is illegal as per FMCA act and it is also a non-bailable offence!

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 futures .
Short USDINR futures .

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 -
https://unofficedforum.s3.dualstack.us-e...

Image after the trade -
https://unofficedforum.s3.dualstack.us-e...

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!
Get trades instantly and discuss them with me at my Slack Channel @ https://unofficed.com/chat/

Our community is full with traders who actually trade!

Telegram: https://t.me/unofficed

Comments

Hey as far as I know, GBP-USD, EUR-USD and USD-JPY are now allowed to be traded from India. I mean the restricition on all cross currency trading is still there but these pairs are now allowed to be traded from India and it is legal. Although only a very few brokers are allowing this facility in INDIA. Correct me if I am wrong.
Reply
muhd_nihal SagarKapoor
@SagarKapoor, Can you site any references regarding this, I cant find any
Reply
SagarKapoor muhd_nihal
@muhd_nihal, Sure
https://zerodha.com/varsity/chapter/cross-currency-pairs/
Go to this link, and you will find all the information about trading of Cross currency pairs on NSE
Reply
Amit_Ghosh SagarKapoor
@SagarKapoor, Yeah, I know this one. I am a sub-broker of a near dozen brokerage firm. Out of them, only Angel Broking allows this; that to if you are a having more than 5L margin!


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.
Reply
SagarKapoor Amit_Ghosh
@Amit_Ghosh, Ohhkaayyy.. Now I have the FUll view of what's going on and why not every broker firm is offering it. Thanks for your Effort Mr. Amit. I really appreciate it.
+2 Reply
Amit_Ghosh SagarKapoor
@SagarKapoor, As a gossip payment (read donation), like my all ideas lol. I am in need of oxytocin!
Reply
SagarKapoor Amit_Ghosh
@Amit_Ghosh, Hahaha it's a two way route brother. Do that for me as well.
Reply
Amit_Ghosh SagarKapoor
@SagarKapoor, I have a crap javascript for this purpose lol. Daily quota exhausted.
Reply
SagarKapoor Amit_Ghosh
@Amit_Ghosh, Ohh hell no buddy? A java script for this ? I woke up to 25 likes. Woohooo..
Reply
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