IGI Logo

Mr. Chintan Mehta, CEO of Abans Holdings, shares views on the latest circulars restricting the use of exchange-traded currency derivatives (ETCD)

This circular form RBI had come on 5th of January 2024 however market was expecting reversal or relief on the same.

Exchanges had not given any comment or circular to this effect till 1 st April late afternoon.

Most of the position on exchange traded currency derivatives were not hedge exposure. It’s heard that most of the brokers are now forcing customers to cut their position unless they can provide self undertaking that they have exposure for the position held in currency derivatives along with CA certifying the same .
Due to such sudden move premium in currency options are traded at very high volatility then normal. There might be situation where losses of customers would be more then margin kept with broker by them.

Retail customers might loose hugh amounts due to change in stand and we might see draught in liquidity across exchange traded currency derivatives.

Above views are of the author and not of the website kindly read disclaimer