Learn-Trade.com Blog

Whether forex trading is perfectly legal in India and there has been a series of debates on this subject. Primarily, there is a feeling that India has long been a closed economy and many sectors open elsewhere in the world were closed as far as India was concerned. But with the reforms in place and the opening up of the economy to foreign investors in many sectors, there has been a never before opportunity to trade in the currency markets at the click of a mouse.

Online from home at the click of a mouse

Forex trading is done from home these days using the internet with an online forex broker. You can trade in the currency markets from the comfort of your home at the click of a mouse. Ever since the global forex trading office Many Forex brokers have opened its offices in India, the country has been reckoned as a favored destination for forex traders and on the same lines one can open a forex account free of cost with these brokers at very low commissions and fees.

And if you are a foreigner and want to stay on in India on business or work, you can play the currency markets as you are used to in your home country.

Compared to other nations where forex trading was perfectly legal years ago, India is now among the many nations where forex currency trading can be done from home at the click of a mouse. Forex trading is also nothing new to India as currency trading has been taking place for many years.

Forex trading has been going on in India for the last ten years and it was couched under transactions of capital accounts. But things are fast changing as India is poised to enter the big world as she steps up the race to keep up with China.

The premier bank of India, the Reserve Bank of India or the RBI had earlier banned remittances for currency trading. Remittances for margin money to facilitate forex trading were not allowed by the RBI in India. Many Indian multinational companies made way for this lucrative trade to take place in India.

Reliance Money started off by introducing Indians to their partners offshore in currency trading and also allowed the intrepid Indian investors used to commodities and stocks for speculation to participate in the global scenario.

CFD or contracts for differences

They were the ones that really kick started forex trading among Indians and brought in retail traders to the circuit. Earlier, the Indian investors could only look forward to stocks and commodities. CFD or contracts for differences was a new concept introduced by them so that investors could check out forex markets and also trade on different exchanges like indices, commodities, stocks, treasuries and forex.

Things are fast chancing in India and the country is racing to keep pace with China as the emerging Asian tiger. The main reason for India as a choice destination for westerners is that the country has a history of colonialism and there is a large pool of English speakers in India. Many of the business systems are at par with those in the UK and the US and the people are not averse to western influences as was the case with China some decades ago.

Forex offers great opportunities online with the launch of operations by Alpari in June 2009 opened the floodgates. The company has also invested loads in training brokers and investors to take advantage of the growing popularity in forex trading.  Compared to the ever popular stock market trading in India, many investors are logging in to trade in forex.

As the market is open 24/7 and the volume is unmatched at trillions of dollars each day, forex is fast gaining popularity in India.

In case you are still confused about the active role of ESOP, you must study well to be well aware of the different functionalities of this plan/scheme. ESOP, also known as Employee Stock Option has been designed to facilitate existing workers and company’s staff members to purchase the shares of their companies beforehand with much confidence. This type of project will certainly help your to consider yourself to be a member of your company. You will be in good financial position by making the deal.

Utilize Opportunity

• ESOP will give you a golden opportunity to utilize the scheme for purchasing shares from the company itself. It is just a reward on behalf of the company’s management.  Company is very satisfied with your performance track record and therefore it is offering the good option to buy the stocks by future date.

However, simultaneously you must know that if the stocks/shares skyrocket, you will taste the fruit of profits but it can also face nosedive. In this case, you need not get worried and it is up to you to shrug off the option. Now before making any written commitment, you need to know how fantastically ESOP performs and how you will get benefits by taking the chance.

Know the Exercising Process

• Frankly speaking exercise is the process of transforming the given � option to stocks or shares. However, to exercise this option, you should pay the exercise fees.  It is very urgent to pay the total price. In actuality the exercise price is taken for changing the option to company’s shares.

This type of transfer requires some charges or fees. Suppose if the total price rate is 20 rupees in Indian currency and you desire to exercise 100 options, and then calculate the total exercise price rate.  It will be 100X10= Rs1000.  However, you must exercise with much care because there is time limit for taking the option.

• The exercise period basically begins from first vesting day.  For exercising the option, three accounts should be in activation.  You must open the following accounts such as NRO Demat Account, Trading Account and NRO Bank Account (Non Resident Ordinary). There are a number of procedures for completing the exercising process. At first Broker holding trading account takes the full responsibility to hand over ïClient Master Details to the specific applicant/ client.

• At the next step, that client will again transfer the detailed information to his workers or staff members of the company. Later, the company management will be responsible to send back the stocks to the DMAT account of the client. Finally, it is up to the client to keep shares or directly sell those stocks/shares with the help of his personal trading account. In the long run, when the shares will be sold, the cheque will enter into the client’s NRO bank

Check Other Details

However, it is mandatory for the client to collect the ‘Auditor’ Certificates. In addition, he should deliver few details for the issuance of that valuable certificate. He must provide the banking details.

The bank statement will have to show that the money has been shifted from your account to the employer’s account with the sole purpose of buying ESOP. Allotment letter should be prepared in perfect way to steer clear of the future hazard.

When the client will get the no-objection signal for the issuance of the Auditor’s Certificate, he is free to sell the existing stocks/shares in the market. At the last lap, the money collected by selling the shares will be transferred into the client’s trading account.

However, before applying for the option/plan, you must consult the experienced chartered accountant or anyone who has the vast knowledge in this ESOP related field who will give you vital feedback to take right decision.