Currency Derivatives are a similar product as Equity Derivatives, but here the underlying asset is Currency instead of Stock/Index. There are four main currencies which are traded on the Indian Market. The currencies that are traded in India market are US Dollars (USD), Euro (EUR), British Pound (GBP) and Japanese Yen (JPY).

Market Participants use currency derivatives for various purposes, including hedging against currency risk associated with international trade and investments, speculating on currency price movements, and managing portfolio exposure to foreign exchange fluctuations. The Importers and Exporters can use the Currency Futures and Options to Hedge their position and limit their exposure to the volatility in the price of a currency they are dealing in. In comparison to Hedging with Bank, initiating a trade on exchange is cheaper for the client.

There are many trading strategies which can be employed in the currency derivatives market using futures, options, and a combination of both. Generally, the volatility in a currency pair is very low compared to Equity markets, hence the margin requirements are also lesser than that of Equity Derivatives.

The Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) jointly regulate the currency derivatives market in India.

The Currency Derivatives market in India operate from Monday to Friday excluding Public Holidays from 9:00 A.M. to 5:00 A.M. and few currency pair trades up to 7:00 P.M.