By Srinivas Dhar | 12 November 2018 06:59:33The futures market is a lucrative business, and traders have been enjoying an extraordinary period of high profits as the Indian market has been rocked by the demonetisation announcement.
The market is expected to open to the public on Tuesday at 9:00 am, with the average daily trade volume of futures in the domestic market at $25 billion.
As the market has become highly volatile, traders are facing a number of challenges.
For starters, the central bank has announced a new limit of Rs 10,000 on the foreign exchange market.
The limit is set to increase to Rs 20,000 by the end of the month.
In India, that is the equivalent of about $2,500 per person.
The central bank also announced a cap on cash withdrawals of up to Rs 10 lakh per day, and that the limit is to be extended to Rs 30 lakh per month, as of January 1, 2019.
The limit will be raised by Rs 2,000 every day for four years.
While this will provide an immediate boost to the markets, there is a long-term problem.
The central bank is also limiting the amount of cash that can be deposited at the Reserve Bank of India (RBI) and the Reserve Banks of India, and limiting withdrawals to Rs 100,000 a day, per person, per bank.
The limits are intended to keep prices stable in the short term, but traders fear that these limits will have a negative impact on the trading of the market.
“We have seen a decline in the volume of trade after the demonettisation announcement, and this will be compounded by a reduction in liquidity on the market,” said Anil Sharma, managing director of market research firm Futures Research & Associates.
As a result, traders have seen an increase in the price of futures and other trading options in the last few weeks.
In the first quarter of 2019, the average volume of the futures trading market was $1.5 billion.
In February 2019, there were $9.4 billion in trading volume for the futures markets, with an average daily average trade volume at $4.7 billion.
For now, the market is witnessing a huge rally.
On November 11, the daily average trading volume was $2.1 billion, and on November 16, the day the RBI announced the new limit on cash withdrawal, the trading volume rose to $3.5 million.
“The markets are trading at an all-time high.
There is an opportunity to see this go further,” said a trader from a trading company based in New Delhi.
“There is a very good chance of a major rally in the market in the next few days.”
While the RBI limit has been announced on the advice of RBI Governor Raghuram Rajan, he has said that it will be extended in phases and that he is looking forward to the full implementation of the limit.