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It is worthwhile to mention here that average daily volumes in NSE for Currency Futures have been growing over the last few years. Apart from being liquid contracts and less volatile if compared to other asset products, trading in Currency Futures can benefit you in several ways and these benefits are being aggressively being marketed by NSE.
A few of important benefits of currency trading are as enumerated below:
1. Less bid-ask difference - The bid-ask difference is the price difference in the quote of buyers and sellers which is important for traders who trade with thin margins. As Currency contracts are highly traded, the bid ask spreads are relatively better and closer, there by giving you better prices.
2. Low Initial margins - Margin for trading in Currency is low as compared to any other asset class product. Your investment amount is less which helps you to take more quantity for trading.
3. Low Taxation and Low Margins - Taxation is the lowest in Currency markets, it does not have S.T.T. (Securities Transaction Tax) and CTT (Commodity Transaction Tax) and for trading in Currency you require low margins which benefit you to take more positions.
4. Higher Trading hours - More of trading hours means more of trading opportunities to trade. In Currency markets trading is done from 9.00 AM to 5.00 PM
5. Product for Traders and Hedgers - Currency Market give a trader opportunity to trade and for Corporate a platform to hedge your forex easily with a click of button with no additional documentation
6. One will be having the early starter advantage in India.
7. Shortage of currency analysts and one can take it as a full time profession oneself or with some brokerage firm.
Nonetheless NSE is aggressively marketing the currency futures but we are still of the firm opinion that it is better to trade in equity segment as Indian market is a shallow market and one can predict stock specific action by virtue of the hot stock tip of the day and make good profit every day.
A few of important benefits of currency trading are as enumerated below:
1. Less bid-ask difference - The bid-ask difference is the price difference in the quote of buyers and sellers which is important for traders who trade with thin margins. As Currency contracts are highly traded, the bid ask spreads are relatively better and closer, there by giving you better prices.
2. Low Initial margins - Margin for trading in Currency is low as compared to any other asset class product. Your investment amount is less which helps you to take more quantity for trading.
3. Low Taxation and Low Margins - Taxation is the lowest in Currency markets, it does not have S.T.T. (Securities Transaction Tax) and CTT (Commodity Transaction Tax) and for trading in Currency you require low margins which benefit you to take more positions.
4. Higher Trading hours - More of trading hours means more of trading opportunities to trade. In Currency markets trading is done from 9.00 AM to 5.00 PM
5. Product for Traders and Hedgers - Currency Market give a trader opportunity to trade and for Corporate a platform to hedge your forex easily with a click of button with no additional documentation
6. One will be having the early starter advantage in India.
7. Shortage of currency analysts and one can take it as a full time profession oneself or with some brokerage firm.
Nonetheless NSE is aggressively marketing the currency futures but we are still of the firm opinion that it is better to trade in equity segment as Indian market is a shallow market and one can predict stock specific action by virtue of the hot stock tip of the day and make good profit every day.
