Forex is Legal in India!?

Dear Friends

Everybody in India says Forex Trading in India is illegal!
how?

I have searched everywhere about legality of Forex in India?

it was introduced in RBI Circular No.64 dated Feb 04, 2004 permitted resident Indians to undertake the purchase and sale of foreign exchange derivatives in India and abroad. However, as per their circular No.51 dated May 08, 2007 the same facility has been withdrawn and as such after that date we have not offered any such services to resident Indians.

After August-2008 Currency Trading allowed in India on Indian Exchanges like www.mcx-sx.com. I dont know whether it allowed in abroad or not. Nobody had nowhere specified it.

But Now,
Alpari Group of UK have launched their office in Mumbai and they offer Forex Trading Abroad from India. Beside that; an Indian Company like
Reliance Money group offering Trading in abroad and they have tied up with CMC Market (www.cmcmarkets.com)

Other big group Anand Rathi Security have tied up with Spread Co., UK (http://premiumsecurity.anandrathi.com)

One is Forex Rainath Group of Lucknow, UP, India (http://www.fxrg.in/), they are with GCI Financial Ltd. of Belize city.

They all are saying that they do not allow Margin or Margin Call. and As per RBI circular No.51 dated May 08, 2007, resident Indian cannot remit his fund for "Margin or Margin Call" abroad for trading.

There is much confusion about legality of Forex Trading in India. But when the above referred big companies have started Forex Trading in India. Does RBI cannot see what is going on?

Do anybody have any answer about this confusion?
What is the conclusion, one suppose to have?
Is it legal or illegal?:thumb:

Pratik Patel:clapping:

when you buy/sell EURUSD you are buying Pair / Instrument.

EURUSD or USDJPY or GBPUSD is not a currency it is instrument.

EUR or GBP or JPY is currency since it has physical existance.
But EURUSD is not a currency since it has no physical existance .... it is exchange rate.

In Plain simple words its still illegal!!! People may find shortcuts to trade but all will be at best 'semi-legal' i.e subject to litigation.

I beg to differ.

http://www.traderji.com/forex/26929...unts-share-your-experiences-7.html#post385850

On Anand Rathi site they mention what is mean by trading USDJPY

they mention USDJPY as FX Premium Securities. since USDJPY is Not a Currency.


Hope this throw some light on what is legal and what is illegal.


http://premiumsecurity.anandrathi.com/premium-securities.aspx#ForeignExchange

" During an FX Premium Securities trade, you buy one currency while simultaneously selling another in order to pay for the first currency.

The two currencies which are the subject of a single FX trade are referred to as a currency pair. For example, USDJPY is a commonly traded currency pair. USD stands for United States Dollar and JPY stands for Japanese Yen. The most commonly traded (and therefore most liquid) currencies are known as the Majors and this includes the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar. Each currency is referred to for the purposes of FX trading by a three-letter code.

The first currency in a currency pair is called the 'base currency'. The second currency in a currency pair is called the 'quote' or' term currency'. The exchange rate quoted for the purposes of FX trading is how much of the quote currency you need to sell in order to buy one unit of the base currency.

Quotation principles
Exchange rates are almost always quoted with five significant figures. This means that most currencies are quoted to the ten thousandth of a currency unit. For example, 1.8525 would be a valid quote for GBPUSD.

The smallest possible exchange rate movement is called a pip. For example, GBPUSD can increase by 0.0001 from 1.8500 to 1.8501, therefore one pip is equal to 0.0001 for GBPUSD. USDJPY can increase by 0.01 from 115.00 to 115.01 therefore one pip is equal to 0.01 for USDJPY. If USDJPY goes up by 0.15, you would say, "USDJPY went up 15 pips".

The Spread
The spread, also known as the dealing spread or the Buy/Sell spread, is the difference between the prices at which you can buy and sell.

The spread is how market makers such as Spread Co are compensated for creating a market for you to trade FX. A wide or large spread is more expensive to you. A narrow or small spread is cheaper for you.

The size of the spread represents how much the market must move in your favour before you begin to make a trading profit. Your trades will always begin at a loss calculated by multiplying the trade quantity by the size of the dealing spread.

For example, if you buy 100,000 USDJPY at a JPY 0.03 spread, your trade will begin at a JPY 3000 loss. See more examples on the left

The law in india as i understand is that you are only allowed to make 10 000 of a foreign currency, anymore than that has to be sacrificed to the government. There is easy ways to avoid that like using e-currency with a card. Or getting an offshore bank account.

Can you tell the source of such misguided information? you are highly mistaken my friend.