Currency Derivatives on NSE and BSE: Contract Specs Guide

If our forex trading guide made the legality line clear — currency derivatives are legal for Indian residents only on recognised exchanges through a SEBI-registered broker — this is the page that answers "okay, but what exactly am I buying?" Seven currency pairs trade as futures and options on NSE and BSE, all cash-settled in rupees, with contract sizes small enough for a retail margin account. This post covers the contract specifications, the expiry and settlement machinery, margins, the costs, and a worked example with honest, labelled-illustrative numbers.

The seven pairs you can trade

The product list has been stable for years: futures and options on four rupee pairs and three cross-currency pairs. Rupee-pair futures launched in August 2008, options in October 2010; the cross-currency contracts (and options on the EUR, GBP and JPY rupee pairs) were added on February 27, 2018. Weekly futures and options on the non-USD rupee pairs followed in December 2020. (Source: NSE currency derivatives product pages, updated July 2024 and May 2025.)

Two specification details worth internalising. The tick size on the rupee pairs is 0.25 paise (₹0.0025), so one tick on a USD-INR contract moves your P&L by ₹2.50 — and the JPYINR quotation is per 100 yen, a convention that catches people out the first time they read the price. On the cross-currency contracts the tick is 0.0001 (0.01 for USDJPY), matching how those pairs trade globally. (Source: NSE contract specifications for INR pairs and cross-currency contracts.)

One clarification for anyone who read about SEBI raising derivative lot sizes in 2024-25: those changes applied to equity index derivatives — the Nifty-family contracts, with minimum contract values pushed to ₹15-20 lakh and lot revisions announced in October 2024 and December 2025. Currency-derivative lot sizes were not touched; the 1,000-unit contracts above are the current specification on NSE's own pages as on 3 November 2026 (cross-checked against Times of India and Economic Times coverage of the equity-index changes).

Expiry cycles and settlement

Currency futures run a 12-month trading cycle of serial monthly contracts; options offer three near months plus quarterly contracts in the March/June/September/December cycle. Weeklies exist on the rupee pairs — eleven serial weekly contracts, expiring on the Friday of the expiry week (excluding the week a monthly contract expires). For everything non-weekly, the last trading day is two working days before the last business day of the expiry month, with trading in that contract closing at 12:30 p.m. If that day is a holiday, expiry shifts to the previous trading day. (Source: NSE contract specification pages; NSE statement of December 7, 2020 for the weekly cycle.)

Everything settles in cash, in rupees — there is no delivery of dollars. The final settlement price is the RBI reference rate for the rupee pairs (published by FBIL, the Financial Benchmarks India company that now administers the benchmark), and FBIL rates for the weekly contracts. Daily mark-to-market settles at T+1 and final settlement at T+2 through the clearing corporation. (Source: MSE USD-INR contract specification; NSE weekly-contracts statement, December 2020.)

Practical upshot: holding a futures position to expiry means your final P&L is struck against an interbank benchmark set after lunch on expiry day — the last hour of trading can still move against a loose position. Most speculative traders square off before expiry and roll.

Margins: SPAN plus extreme loss

You post margin, not the full contract value. The clearing corporation (NSE Clearing, formerly NSCCL) computes an initial margin using SPAN — a portfolio-based simulation that covers a 99% one-day risk estimate, computed over a two-day horizon for futures — plus an extreme loss margin on top. Brokers are required to collect these upfront from clients and pay them up the chain, and the numbers are recomputed and settled daily. Currency margins typically run a few per cent of contract value — a single USD-INR lot (₹95,000-notional at the early-November 2026 rate near ₹95) has recently needed a few thousand rupees of margin, but the exact figure changes daily with volatility, so treat the broker's margin display as the truth. (Source: NSE Clearing margining documentation, currency derivatives segment.)

What actually moves these prices

USD-INR is a managed float, so its drivers differ from a free-floating pair:

• Interest-rate differentials. The futures price leans against the rupee-dollar interest gap; wide differentials show up as predictable term-structure curves rather than surprise gaps.
• RBI intervention. The Reserve Bank buys and sells dollars to smooth extreme moves, which caps tail volatility in both directions — one reason INR pairs rarely reproduce the violent swings of free-floating pairs.
• Global dollar moves and risk sentiment. When the dollar strengthens globally or equities fall, the rupee typically weakens; crude-oil prices flow straight into India's import bill and the exchange rate.
• Flows. Foreign portfolio investment inflows and outflows, remittances and trade data shift the spot rate the derivatives track.

The cross-currency pairs (EUR-USD, GBP-USD, USD-JPY) are pure global pairs — their prices follow the same forces as the international market, without the rupee in the equation. That is exactly why they suit traders expressing a dollar or euro view without a rupee opinion.

How a trade routes — and what it costs

Place an order on your broker's app and the same plumbing as equity derivatives takes over: broker routes to the exchange's order book; the exchange matches the trade; the clearing corporation interposes itself as counterparty and runs daily margining and settlement. Your opposite number is never a market-maker taking the other side personally.

The cost stack is small, and notably excludes the two transaction taxes people expect:

Sources: NSE's stamp-duty and SEBI-fee page (currency and interest-rate derivatives: 0.0001% buyer); exchange transaction charges cross-checked against Zerodha's current charges table and Livemint's report of the October 2024 revision, as on 3 November 2026; the absence of STT and CTT on currency derivatives follows from the STT schedule applying to equity transactions only. Brokerage is charged per broker and usually dominates the statutory fees on small trades.

A worked USD-INR futures trade (illustrative numbers)

Say you expect the rupee to weaken slightly before the month-end import payments and buy one monthly USD-INR futures lot:

1. Entry: buy 1 lot (1,000 USD) at ₹95.00. Notional value: ₹95,000. Illustrative margin: ~₹3,500 (SPAN + extreme loss, per the broker's display that day).
2. Over the week the contract trades to ₹95.60. Daily mark-to-market credits about ₹600 to your account in pieces, not one lump — 1,000 × ₹0.60.
3. Exit: you sell at ₹95.60. Gross profit: ₹600. Statutory costs for the round trip: roughly ₹1-2 (0.00035% of ~₹95,000 twice, plus stamp duty and SEBI fee). Brokerage per your plan — on a flat-fee plan, maybe ₹20.
4. Net: about ₹578 on ₹3,500 of margin — near 16% on margin for a 0.63% move in the exchange rate. That is leverage in one frame: the same move reversed costs you the same money.

Had you held to expiry instead, the final settlement would strike at the RBI reference rate two working days before month-end — whatever it prints is your price, no matter what your exit plan was.

The arithmetic above is labelled-illustrative: real margins, prices and brokerage differ by day and by broker. Run any live trade through your broker's brokerage calculator before sizing it.

Who this instrument actually suits

Two honest use cases. Hedgers: an importer paying dollars in June can lock today's rate by buying June futures; a family remitting tuition abroad can do the same — small businesses use these contracts exactly this way. Traders: if you have a genuine, time-boxed macro view (a rate-decision week, a budget day, a crude spike), currency futures let you express it with defined margin and clean settlement. What it does not suit is income-seeking or buy-and-forget money — the instrument has no yield, expires, and rewards attention you may not want to give. If you trade it, read the taxation post next: profits are business income at slab rates, and the filing machinery expects you to track turnover properly. And if you arrived here from an offshore app's advertisement, start with the legality guide before anything else.

Educational content only, not investment advice. Currency derivatives can lose more than the margin on gap moves; consult a SEBI-registered adviser for decisions specific to you.