Two ways to hold a currency view — and the one open to residents
This is the India version of the lesson. Indian residents may trade currencies only through exchange-traded currency derivatives on NSE, BSE or MSE, with a SEBI-registered broker. Education only, no tips.
Two ways to hold a currency view
Banks and companies exchange currencies over the counter (OTC): directly with each other, at negotiated prices, any size, any date. An exchange instead lists standard futures contracts that anyone with a broker can trade on a public order book.
Futures: standard and scheduled
A currency future fixes the size, the expiry date and the settlement rule. On NSE the USD/INR lot is USD 1,000, monthly contracts stop trading two working days before the last business day of the expiry month, and the contracts are cash-settled in rupees; no currency changes hands (as of 3 November 2026).
Spot OTC: flexible, private
OTC spot deals are bilateral: a bank quotes, the client accepts, the currencies change hands two business days later. In India, residents deal OTC with banks that are RBI-authorised dealers for genuine needs — paying for imports, receiving export proceeds, travel, education abroad. Offshore “retail spot forex” and CFD accounts that imitate this market are not authorised for residents.
Costs and margin
On the exchange you pay brokerage, exchange transaction charges, stamp duty and GST, and you post margin set by the clearing corporation. Prices are the same for everyone at the same moment. In OTC deals with a bank the cost is mostly in the rate you are quoted.
You’ve mastered: spot vs futures
OTC spot is bilateral and flexible; futures are standard and centrally cleared
In India, residents use OTC deals with authorised banks for genuine needs only
For trading, the lawful route is exchange-traded currency derivatives
Exchange costs are itemised; margin is set by the clearing corporation
