Interactive Brokers Group, Inc. · NASDAQ:IBKR

Interactive Brokers — Investor Presentation (March 2016)

40 slides from Interactive Brokers's investor presentation, Mar 17, 2016

  1. Slide 1: NSE Presentation Template Guideline: Exchange Traded Currency Futures

    NSE Presentation Template Guideline Exchange Traded Currency Futures 17th March 2016

  2. Slide 2: Agenda

    Agenda Introduction Importance of currencies Product offering Trading & Hedging Comparison: Currency & NIFTY Factors to watch Participation process Contract Specifications

  3. Slide 3: Foreign Exchange – An asset class

    Foreign Exchange – An asset class  One of the largest traded asset globally  Global daily average turnover of USD 5.3 trillion*  In India, daily average turnover of USD 31 billion*  Traded in the over-the-counter (OTC) and on exchanges  Available to Resident Indian individual as an asset class

  4. Slide 4: Importance of Currencies

    Importance of Currencies • Country • Individuals – Trade balance (Imports & – Remittances Exports) – Foreign education – Inflation – Imported goods – Global competitiveness – International holidays – Economic Growth – Inflation • Corporate – Imports & exports – Foreign currency loans

  5. Slide 5: USDINR

    USDINR  1991: BOP Crisis USDINR  1995: BOP Stress 75.00 Current 1997: Asian Currency Crisis Account  65.00 Deficit concerns  2001: Dot Com Bubble BJP looses 2008  2004: BJP looses election 55.00 elections Confidence in Global Financial India  2006: Fall in Crude oil price Asian deteriorates Cr

  6. Slide 6: USDINR Daily Volatility (OHLC)

    USDINR Daily Volatility (OHLC)

  7. Slide 7: Product Offering

    Product Offering NSE offers cash settled Currency Futures and Currency Options Currency Futures: Currency Options:  USDINR  USDINR  EURINR  GBPINR  JPYINR

  8. Slide 8: Product Specifications Currency Futures

    Product Specifications Currency Futures Symbol USDINR EURINR GBPINR JPYINR Unit of trading 1000 USD 1000 EURO 1000 POUND 1,00,000 YEN Tick size 0.25 paise or INR 0.0025 Trading hours Monday to Friday 9:00 a.m. to 5:00 p.m. Contract trading cycle 12 month trading cycle. Expiry Two working days prior

  9. Slide 9: Product Specifications Currency Options

    Product Specifications Currency Options Symbol USDINR Option type Premium style European Call & Put Options Premium Premium quoted in INR. Unit of trading USD 1000 Tick size 0.25 paise i.e. INR 0.0025 Trading hours Monday to Friday 9:00 a.m. to 5:00 p.m. (IST) 3 serial monthly contracts followed by

  10. Slide 10: New Regulations in ETCD

    New Regulations in ETCD  Circular Reference:  RBI Circular: RBI/2014-15/526 A .P. (DIR Series) Circular No. 90 (Date: 31, March 2015)  SEBI Circular: CIR/MRD/DP/ 04 /2015 (Date: 08, April 2015)  NSE Circular: NSE/SURV/29439 (Date: 13, April 2015)  New Limits:  USD-INR 15 million – long as well

  11. Slide 11: Position Limits for Domestic Participants

    Position Limits for Domestic Participants  Domestic participants (DP) can take positions beyond the above specified limits on the basis of their past performance or actual underlying exposure, subject to following limits: USDINR EURINR GBPINR JPYINR Higher of 6% of total Higher of 6% of total Highe

  12. Slide 12: Trading in Currency Futures (Buy)

    Trading in Currency Futures View: Investor expects USDINR price to increase from 67.00 to 68.00 Strategy: Investor will buy USDINR contract Currency Pair USDINR Scenario 2 Trade Date 7th Jan 2016 Future Price (INR) 66.00 Trade Sell Futures Futures Contract Expiry Loss (INR) -1,000 Date 27th Jan 2016

  13. Slide 13: Trading in Currency Futures (Sell)

    Trading in Currency Futures View: Investor expects USDINR price to decrease from 67.25 to 68.25 Strategy: Investor will sell USDINR contract Currency Pair USDINR Scenario 2 Trade Date 14th Dec 2015 Future Price (INR) 68.25 Trade Buy Futures Futures Contract Expiry Loss (INR) -1,000 Date 29th Dec 201

  14. Slide 14: Hedging Using Currency Futures

    Hedging Using Currency Futures An individual wants to remit USD 10,000 to his son studying abroad on 25th Feb. 2016. On 01st of Feb., he expects USDINR price to increase and hedges through currency futures. Month End - Settlement of Currency Futures @ RBI Ref Futures Rate for Feb. contract: 67.00 Ra

  15. Slide 15: Hedging Payoff at Different Maturity Rates

    Hedging Using Currency Futures Possible out comes on different maturity rates • Individual either gets compensated or gets the best rate with bank RBI Ref. Payoff of 6,000 Payoff of Buy Rate on underlying futures @ 67.00 Net Payoff Net Pay-off Expiry USDINR 4,000 62.00 620,000 (50,000) 670,000 63.00

  16. Slide 16: Trading in Currency Options (Long Straddle)

    Trading in Currency Options (Long Straddle) View: Investor expects USDINR price to move sharply from 68.25 in any direction Strategy: Investor will Buy USDINR call and Buy Put of same strike Currency Pair USDINR Scenario 2 Trade Date 9th Feb 2016 USD Price (INR) 70.25 Call Value Rs.2.00 Futures Cont

  17. Slide 17: Trading in Currency Options (Short Straddle)

    Trading in Currency Options (Short Straddle) View: Investor expects USDINR price will not move from 68.25 in any direction Strategy: Investor will Sell USDINR call and Sell Put of same strike Currency Pair USDINR Scenario 2 Trade Date 9th Feb 2016 USD Price (INR) 70.25 Call Value Rs.2.00 Futures Con

  18. Slide 18: USDINR Options OI (In Contracts)

    USDINR Options OI ( In Contracts)

  19. Slide 19: ROI Analysis – Currency vs. Nifty Futures

    ROI Analysis – Currency vs. Nifty Futures Following comparison shows the Return on Investment (ROI)from USDINR and NIFTY with 1% move in price Currency Nifty Contract Size USD 1000 75 Nifty Trade Buy 1 contract Buy 1 contract Traded Price 67.00 7,500 Notional Value (INR) 67,000 (1,000*67.00) 5,62,50

  20. Slide 20: Factors to Watch

    Factors to Watch  Economic data  Inflation  Growth rate  Trade data (Import & Export)  RBI monetary policy Stance  RBI intervention  Crude oil price  FII Activity (Inflows & Outflows)  Equity markets  Capital flows  USD against major currencies  Global Events  Commodity prices  Politic

  21. Slide 21: Equity Markets & USDINR

    Equity Markets & USDINR  A fall in equity markets depresses USDINR & Nifty the overall sentiment of investors – 80.00 inducing FIIs to pull out funds from 8,900 the markets 75.00 8,400 70.00  The sentiment in the local equity 7,900 market is also effected by the 65.00 7,400 sentiment in the global

  22. Slide 22: Crude oil price & USDINR

    Crude oil price & USDINR  Crude Oil constitutes nearly 70% USDINR & WTI Crude Oil of India’s total imports 72.00 120.00 110.00  Oil prices denominated in USD & 67.00 100.00 payment is made in USD 90.00 62.00  Increase in oil prices increases 80.00 the import bill 57.00 70.00 60.00  High oil pric

  23. Slide 23: USD Index & USDINR

    USD Index & USDINR  US Dollar Index (DXY) is an index (or USDINR & Dollar Index measure) of the value of the US 70.00 Dollar relative to a basket of foreign 100.00 currencies, often referred to as a 65.00 basket of US trade partners' 95.00 currencies 60.00 90.00  Basket of foreign currencies inclu

  24. Slide 24: Trade Deficit & USDINR

    Trade Deficit & USDINR  Trade deficit indicates the USDINR & Trade Deficit difference of exports over imports 22.00 67.00 20.00  Trade deficit indicates more 18.00 imports than exports 62.00 16.00  Imports from India are 14.00 denominated mostly in USD 57.00 12.00  Trade deficit indicates more 5

  25. Slide 25: Capital Flows & USDINR

    Capital Flows & USDINR  Capital flows predominantly consist of Foreign Direct Investments (FDI) and Foreign Institutional Investors (FII)flows  If the capital inflows increase, it will create a supply of USD and USD will depreciate/weaken against the INR  Similarly, if there are capital outflows

  26. Slide 26: Inflation rate & USDINR

    Inflation rate & USDINR  High inflation rate creates an USDINR & Inflation unfavorable impression about the 14.00 economy 68.00 12.00  FDI and FII flows reduce in countries where the rate of inflation is too 63.00 10.00 high – this leads to reduced supply of USD 8.00 58.00  A rising inflation als

  27. Slide 27: Interest rate & USDINR

    Interest rate & USDINR  The value of a countries currency USDINR & 10 yield GOI Bond yield depends on the interest rate of that 70.00 10.00 country 65.00 9.50  If the interest rate in India rises, FIIs start investing in the local debt 60.00 9.00 market to take advantage of higher rates 55.00 8.50

  28. Slide 28: Intervention by RBI & USDINR

    Intervention by RBI & USDINR  The Reserve Bank of India (RBI) regulates the currency rate of India  RBI intervenes when it feels the need to stabilize currency markets and to reduce the market volatility  A higher currency volatility impacts the importers and exporters  RBI intervenes during tim

  29. Slide 29: Transaction & Statutory Charges

    Transaction & Statutory Charges Currency Equity Futures Futures SEBI Fees % of Turnover 0.0002% 0.0002% Stamp Duty % of Turnover 0.002% 0.002% Exchange Charges % of Turnover 0.0011% 0.00325% Investor Protection Fund 0.0005% 0.0000% STT NA 0.01000% Total Charges* 0.00370% 0.01546% * Excluding brokera

  30. Slide 30: Thank You

    Thank You Thank You Contact us on : fig@nse.co.in 022-26598431 / 26598305 / 26598246 Disclaimer –Disclaimer Information – Information provided in provided this presentation in this presentation is for general is for information general information purpose only. purpose The final only.product specifi

  31. Slide 31: Interactive Brokers: The Professional's Gateway to the World's Markets

    7) be Interactive Brokers The Professional’s Gateway to the World’s Markets a

  32. Slide 32: A Brief Introduction to Interactive Brokers

    A Brief Introduction to Interactive Brokers • Interactive Brokers Group (IBG LLC) equity capital exceeds $5 billion. IBG LLC is listed on the NASDAQ with stock code IBKR • Interactive Brokers Group was founded by its Chairman and CEO Thomas Peterffy. • Our real-time margining system marks all custom

  33. Slide 33: Interactive Brokers Group Structure

    Interactive Brokers Group Structure

  34. Slide 34: Superior Professional Trading Technology

    SUPERIOR PROFESSIONAL TRADING TECHNOLOGY • Our trading platforms have been designed with the professional trader in mind: • Optimize your trading speed and efficiency with our market maker-designed Trader Workstation (TWS). Easily toggle back and forth between our two interfaces: – Mosaic provides o

  35. Slide 35: Order types and algos

    Order types and algos may help limit risk, speed execution, provide price improvement, allow privacy, time the market and simplify the trading process through advanced trading functions.

  36. Slide 36: Account Management

    7) 3 Interactive Brokers The Professional's Gateway to the World's Markets IB’s Account Management system lets you configure and manage your IB account from a single window and gives you convenient access to these account features: la (c {03 g Reporting Funding Account Configuration Trading 0 @) 6)

  37. Slide 37: Product Commissions Minimum Per Order

    Product Commissions Minimum Per Order NSE Equities 0.05% INR 30 NSE Futures 0.01% N/A NSE Index Options INR 15 per contract N/A NSE Stock Options INR 25 per contract N/A Notes: 1. Intraday closing leg free for NSE stocks/futures. NSE Stocks has a minimum of INR 30 per order. 2. Additional charges of

  38. Slide 38: Required Minimums

    REQUIRED MINIMUMS NSE Account with - Minimum initial deposit of USD 2000 in INR - Minimum monthly commissions of USD 5 in INR Interactive Brokers - Minimum liquid net worth requirement of USD 6000 in INR for NSE Stocks and USD (India) Private 30,000 in INR for NSE Derivatives (Proof documents are re

  39. Slide 39: Process flow of how it works

    Process flow of how it works: Go to IB’s website and click on open an account, fill online application Submit Documents online for global account. For the NSE, our application services group will print and courier the forms for physical signatures Upon receiving the documents, IB Compliance will rev

  40. Slide 40: Thank You!

    Thank You! Mr. Ankit Shah Director of Sales Interactive Brokers (India) Pvt Ltd Tel: 0091 22 61289836 E-mail : ashah@interactivebrokers.com Website : www.interactivebrokers.com

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