Leading stock exchange NSE launched weekly futures and options contracts on three currency pairs – Euro-Indian Rupee (EUR-INR), Japanese Yen-Indian Rupee (JPY-INR), and Pound Sterling-Indian Rupee (GBP-INR). These are the first weekly contracts in the currency segment, although weekly contracts are available on other asset classes like equity derivatives.
Until the weekly contracts were launched, the exchange offered cash-settled futures and options (F&O) on four currency pairs – USD-INR, EUR-INR, GBP-INR and JPY-INR and three cross currency pairs – EUR-USD, GBP-USD and USD-JPY.
“The weekly derivatives on currency pairs apart from reducing time-related costs, will also help market participants to hedge their currency exposure from short-term market movements,” according to NSE MD & CEO Vikram Limaye. With multiple developments in the global market and uncertainties due to the ongoing pandemic among others unfolding this year, there has been a need for exchanges to make available a wider product suite to match the needs of investors and hedgers, the exchange said.
The contract cycle available is 12 serial monthly contracts in futures and 3 serial monthly contracts followed by 3 quarterly contracts of the cycle March/June/September/December in options.
The launch of weekly derivatives in these currency pairs, will allow participants to be able to manage their exposures more efficiently in a market with tight bid-ask spreads as compared to the OTC markets.