Zerodha NRML Currency derivatives

NRML restrictions in currency contracts

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NRML (overnight carry) positions in currency derivatives on Zerodha have specific restrictions compared to other segments. Currency NRML margin requirements and operational rules differ from F&O equity NRML.

Currency NRML margin

AspectCurrency NRML
Margin (% notional)3-4% (lower than equity F&O)
Overnight carryAllowed
Daily MTMApplied
SettlementCash, INR

The low margin requirement gives ~25-30x leverage on currency futures, much higher than equity F&O leverage.

Restrictions on NRML currency

RestrictionDetail
Eligible contractsUSDINR, EURINR, GBPINR, JPYINR, some cross pairs
SettlementAt maturity per contract specs
Position limitsPer SEBI / RBI; varies by contract
FEMA complianceStandard Indian FX regulations
LRS implicationsNone for INR-denominated currency futures

Pre-expiry physical settlement

Unlike stock options, currency futures and options are cash-settled at maturity:

  • No physical-delivery margin layer.
  • Standard SPAN + Exposure throughout the life of the contract.
  • Pre-expiry margin doesn’t escalate like stock F&O.

Currency-specific risks

  • Sustained INR depreciation: Can cause large MTM moves on USDINR long.
  • Central bank intervention: RBI may act on the FX market, affecting derivatives.
  • Cross-currency moves: EURUSD / GBPUSD shifts propagate to INR pairs.

Comparison with equity F&O NRML

AspectCurrency NRMLEquity F&O NRML
Margin3-4% notional10-20% notional
Leverage25-30x5-10x
SettlementCashCash (index) / Physical (stock)
Daily MTMYesYes
Pre-expiry marginNoneYes for stock options

Currency offers higher leverage but with lower-volatility underlying.

See also

External references

References

  1. NSE Clearing, Currency derivatives margin framework, nseclearing.com.
  2. SEBI, Currency derivatives framework, sebi.gov.in.
  3. Zerodha, Currency segment policies, zerodha.com.

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