Established back in SEBI is the official agency that is responsible for issuing the license for forex brokers doing business in this country. There are three SEBI registered stock exchanges in the country that act as fx brokerages:. In case you want to trade only INR against main currencies, you can use some of the above companies legally.
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But in case you want to trade EURUSD and such pairs, you will have to look abroad or into our comparison on this page. With above mentioned international brokers, the choice is much wider. The fact that even a small investor can participate in this money game is the main reason that attracts hundreds of thousand of retail traders from all over the world!
Foreign forex trading platforms are illegal in India
The exchange rate is always reported as 4, decimal places. The last decimal place is called as pip. However, one has to keep in mind that the leverage is effective even in the event of a negative price development. On the other hand, if you believe that the euro will depreciate against the dollar in the future, just go short and sell euros against dollars. With every pip that the euro loses against the dollar, you make a profit!
Trading Bonuses are not available for European Union residents. Automated page speed optimizations for fast site performance. Skip to content Forex trading has been very popular in India.
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However, they are illegal in India. They execute binary trades. It means, the trader either gets a fixed amount or nothing. For example, you can bet on whether the US dollar would fall against the Indian rupee.
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If it does, you get a fixed amount. If you lose, the platform keeps the money. Such binary trades are not permissible in India and many other parts of the world. Binary transactions are between the platform and the trader.
There is no third party involved. If you look at how stocks trading works; the exchange's role is to provide a platform that facilitates trades between the buyer and seller. Many online platforms offer high leverage to users.
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Some even advertise times the investment amount. They can do so as there is no third-party involved. Even if the trader utilizes the margin, the platforms have nothing to lose as they don't have any liability to pay it to a third party. According to the Reserve Bank of India's Liberalized Remittance Scheme, a person cannot use the money transferred abroad for speculative purposes or to provide margin money for trading.
It allows investments but on delivery basis. In India, individuals can trade in forex on stock exchanges but with restrictions. Due to these restrictions, the forex market in India is smaller compared to many other developed markets.
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An investor can trade the four pair by opening a trading account with a broker. There are also chances that you can fall prey to fraudsters claiming to be an online forex platform. It has happened in the past. The trader wins small trades initially.