newwurldmn India has its own futures exchanges (MCX & NCDEX) where various commodities are traded in Indian Rupees. MCX has a hugh volume for Metals and Energy whereas NCDEX is mainly for Indian Agro Commodities like Wheat, Corn, Cotton, various Spices etc. I am trading on these two exchanges. But then the movements are same worldwide for a given commodity. e.g. Lets say I trade Copper futures extensively on MCX in Indian Rupees. But to do my analysis, i always use USA Copper future listed on CME. Another example is when I trade LEAD/ZINC, I always use LEAD/ZINC listed on LME for my analysis. The price movements are ditto same. I hope this answers your question!
It does. So why do you need a futures account in the US? I can open an account in India as an NRI and have been contemplating it if it gives me access to certain European futures that Americans can't get.
Maverick74 As Jim Rogers correctly says 'India is a land of Contradictions' India is a booming market but the fact is an individual can not send money out to trade futures on overseas exchanges as futures is a leveraged/margin product. But then at the same time one is allowed to work as a prop trader (if there is no out remittance is involved) There are very few (max 3-4) prop firms in India. These are true prop firms which never takes any deposit from traders. There is one in my city also but its purely into the Stocks traded on NYSE, NASDAQ. How they have set up their shop here and/or how they are managing the legal issues, that i don't know. All these firms have their parent company sitting in USA. RBI is a central bank of India and it also acts as regulatory body for anything involving foreign exchange. When I need to send money to overseas broker, my bank needs to convert Indian Rupees into USD. But then there are guidelines specified by RBI. One of the guidelines prohibits Indian Residents to convert Indian Rupees into Foreign Currency if the purpose is to trade on leverage (Futures, Forex, SSF, CFD, Stocks on Margin etc.) Only thing that is allowed is stocks purchased in cash accounts. I hope its clear now.
newwurldmn I need futures account in the USA because there are certain short comings like (1) Indian Commodity Exchanges do not run for 24hrs a day. They run from 10:00AM to 11:30PM IST only. So i always feel bit unsecured when the markets are closed, as I am not a day trader. (2) Also there are many holidays in India. So If there is any significant event in western countries, I need to take a hit in terms of gap up or gap down the next day. (3) At the end of day, Its the movement of futures(Metals/Energy) listed in USD in USA which moves all other corresponding world futures. It is never a vice versa (4) At the end of day, I am doing all my analysis on futures from USA. So its easier to trade the same. For same futures in INR i need to consider USDINR movements as well, which is an additional task (especially when there is wide movement in USDINR) (5) Many times the margin requirements are high. In case of agro commodities margin requirements go as high as 20% to 30% (in rare cases even upto 50%) (6) Also USA markets as wide range of futures products which are not available in India. (7) Also even though India is know for IT, its own local IT systems are way behind when compared with US Brokers/prop firms. Also As an NRI, what your are contemplating is not possible. RBI guidelines are very complicated.