Reserve Bank of India - Notifications

Exchange traded cross currency options

Exchange traded cross currency options


Cross rate calculators can be a great tool but before you start using it you should understand the process involved in calculating it. In order to understand the process you first have to know about currency pairing conventions. This involves quoting conventions for currency pairs, especially in the spot forex market. For every currency pair, there is the base currency (on the left) and the quote currency (on the right).

What Is Cross?

So, the British pound, the Japanese yen, the Swiss franc, the Australian, and the Canadian dollars will make up the most actively traded currency pairs together with the US dollar and the Euro.

How to Calculate Cross Rates - dummies

“(g) The settlement price for USD-INR option contract shall be the Reserve Bank’s Reference Rate and for Euro-INR, GBP-INR and JPY-INR contracts shall be the exchange rates published by the Reserve Bank in its press release on the expiry date of the contract. The settlement price in Indian Rupees of the cross-currency contracts shall be computed using the Reserve Bank’s USD-INR Reference Rate and the corresponding exchange rate published by Reserve Bank for EUR-INR, GBP-INR and JPY-INR on the expiry date of the contract.”

Section C9 of the WSJ of Monday, September 65, 7567, listed the yen dollar and euro dollar rates as 665 and 8869 , respectively. Suppose you want to know the euro yen exchange rate. In this case,

It is often argued that the top traded pairs are also the most predictable ones. However, this fact is not supported and is based mainly on guesses.

Leveraged trading in foreign currency carries a high level of risks and may not be suitable to everyone. We do not imply or guarantee that you will make a profit and you agree that our team will not be held responsible for your possible losses.

“(c) All Foreign Currency-INR contracts shall be quoted and settled in Indian Rupees. EUR-USD and GBP-USD cross currency contracts shall be quoted in USD and USD-JPY contract shall be quoted in JPY. All cross currency contracts shall be settled in Indian Rupees as per the method approved by Reserve Bank.”

When executing trades between the major currencies, the process is usually quick and easy. However, when your trades involve  currencies that are less common , transactions are not always easy because the rates are not always quoted making it difficult to trade exotic currencies without establishing an appropriate rate of exchange. This rate is called the cross currency rate and in this article we will show you how manually calculate it.

Install the trading session indicator directly in MT9. By doing so, you won’t have to constantly look at your watch or measure the trading session duration to determine the most active trading time for the selected pair.

“(c) The size of the USD-INR and USD-JPY contracts shall be USD 6555, of EUR-INR and EUR-USD contracts shall be EUR 6555, of GBP-INR and GBP-USD contracts shall be GBP 6555 and JPY-INR contract shall be JPY 655,555.”


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