Partner With Us NRI


Currency options refer to a contract that provides the buyer with the right, but not the obligation, to purchase or sell a specific currency at a pre-decided exchange rate either on or before a specific date. Usually, a seller is paid a premium for this right. The currency options are traded, or bought and sold, on the foreign exchange market. These are popular financial instruments used for hedging or speculating on currency movements.

An Overview of Currency Derivatives

In Currency Derivatives Segment (CDS), four INR pairs are available for trading at NSE.

These four INR pairs are: -


In a currency pair, left hand side currency is known as base currency and right hand side currency is termed as quote currency. At an exchange base currency is traded for quote currency.

Currency Options are cash settled in INR.

Both Futures and Options are available for trading in Currency Derivatives

Market is open from 9:00 AM to 5:00 PM

Tick size in currency derivatives is 0.0025 (25% of one paise)

Daily MTM is done on T+1 and Final Settlement is done on T+2 basis

Highest trading volume is observed in USDINR with more than 90% amongst all currency pairs.

What are the Types of Currency Options?

The types of currency options are given below:

  • Currency call: When the price of a currency pair rises, traders purchase currency call options to benefit from the increasing prices. Call options give the buyer the right to purchase the currency pair at a pre-decided strike price. This purchase takes place either on or prior to the contract expiration date. If the currency pair is less than the strike price at the time of expiration, the value of the option will be zero, and the seller will get the premium.
  • Currency Put: On the other hand, when the price of currency pair falls, traders buy currency put options to profit from the falling prices. The put option buyer gets the right to sell the currency pair at a pre-decided strike price either on or prior to the expiration of the contract. However, if the currency pair is more than the strike price at the expiry, the option’s value will be zero and it becomes worthless, while the seller will get the premium.

What are the Benefits of Currency Options Trading?

There are various advantages to investing in currency options. They are as follows:

  • Investing in currency options provides traders with an opportunity to leverage trades since the cost of the options contract is lower than the cost of actually purchasing the contract. This enables you to take a large position for a smaller premium.
  • Currency options trading is also a low-cost hedging strategy used by large companies to protect themselves from unfavourable currency movements.

Currency Options

One Lot =1000 Base Currency except in JPY; i.e. 1000 USD, 1,000 GBP, 1000 EUR, 100,000 JPY

Option premium is very low

Options are available in 25 strike prices; 12 ITM, 12 OTM and 1 ATM (25 CE and 25 PE)

Monthly and Weekly Contracts are available for trading in all INR pairs

Weekly Options expire on every Friday

Monthly Options expire two days before last working day of a month by 12:30 PM

Contracts are settled at RBI reference rate

Weekly Options are highly liquid.


In India, currency options are traded on exchanges like the National Stock Exchange (NSE), the Bombay Stock Exchange (BSE), and MCX-SX. 

Yes, currency derivatives are different from equity derivatives in terms of the underlying asset being traded. Currency derivatives deal with currency whereas equity derivatives deal with stocks and indices.

To trade currency options you need to open a demat account and a trading account with a broker or banking institution. 

You can trade in currency options as per pre-defined timings on all weekdays except market holidays. The currency derivatives market is inoperable on Saturdays and Sundays apart from declared holidays. The timings for the same are as follows:

  • Market opening time: 9:00 am
  • Market closing time: 5:00 pm