The commencement of futures trading in three new currency pairs has received good response from market participants, with euro futures contract garnering two third of the market share on the National Stock Exchange (NSE) as well as the MCX?SX.
The Euro futures contract recorded a total turnover of Rs 1,173 crore on NSE compared with Rs 45 crore and Rs 59 crore turnover recorded by futures contract in yen and pound, respectively.
The debut trading is seen to be as impressive. ?The turnover in the Euro futures contract is almost 10 times more when compared with the turnover of dollar futures on its debut day. This clearly indicates that the exchange traded currency futures market is maturing in India,? points out Pramit Brahmbhatt, CEO of the broking firm, Alpari Forex (India).
When rupee?dollar contracts were introduced in August 2008, it had generated Rs 200 crore on its debut day. However, at the moment NSE and MCX?SX generate an average daily turnover of Rs 14,000 crore and Rs 14,700 crore, respectively.
Compared to NSE, the turnover on the MCX?SX was higher in the euro futures at Rs 1,417 crore, while futures contract in pound and yen stood at Rs 665 crore and Rs 639 crore, respectively.
However, the open interest, in the euro contracts was higher on the NSE at 7,586 contracts and on the MCX?SX lower at 5,081 contracts. This is because the number of day traders tend to be higher on the MCX?SX and they would not want to keep many open positions.
J Moses Harding, head (global markets) at IndusInd Bank, believes, ?This is not surprising as its value is derived from rupee?dollar and dollar?euro futures contracts, which are the popularly traded contracts on the OTC markets. The exchange trading has created opportunities for traders and other participants generating higher volume.?
He reckons that amongst the three newly introduced currencies pairs Euro futures contract would capture around 60% of the market share.