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Turnover on the currency futures platform of the United Stock Exchange tumbled sharply in the last two days as the exchange gears up to sort out various issues.
The exchange, which recorded an average daily turnover of ₹3,691 crore in March, saw turnover plunge 96 per cent to ₹146 crore on Wednesday. It dipped further to ₹145 crore on Thursday.
Arindam Saha, Director (business development), USE, said the exchange had been planning to upgrade technology since December, but it was postponed twice and it would now be rolled out in June.
“So participants may have turned a little sceptical and they probably want to wait and watch. We also have other issues. We do not have a clearing corporation of our own. The exchange is working on the problematic areas and we expect things to be normal soon,” he said.
Turnover on other currency trading platforms of the BSE, the NSE and the MCX Stock Exchange has also fallen, but not to the extent of the USE.
On Thursday, turnover at the BSE fell to ₹3,867 crore, down from ₹4,586 crore registered on Wednesday. The exchange recorded an average daily turnover of ₹5,759 crore in March.
Similarly, on the NSE, the largest among currency futures exchanges, turnover was down 7 per cent at ₹9,117 crore, on Thursday. In March, it registered an average daily turnover of ₹9,855 crore.
In contrast, MCX-SE, rattled by the ₹5,600-crore scam in its subsidiary National Spot Exchange, saw its turnover stabilise at ₹3,324 crore against ₹3,039 crore on Wednesday. However, the turnover was lower compared to the March average of ₹4,394 crore.
Trading losses Traders attribute the fall in turnover on the exchange in April as an annual feature with participants trading losses. The earnings from currency futures are treated as business income and losses in currency exchanges can be set off against profit in other businesses.
If a trader accumulates loss in currency futures, he would trade this loss with another participant who has made huge profits. This helps the person who has made profit to save tax by setting off his profit against the loss traded on the currency futures platform.
“It is a mutual understanding between traders, and whatever loss incurred in the transaction is settled off-market in cash,” said a trader on condition of anonymity.
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