RBI has given permission to Exchange to introduce Rupee/ Dollar options. With this matter of time , introduction of Currency option seems imminent.
NCDEX & MCX have recently introduce other currency for trading (EURO, YEN & Pound) making these market very liquid. In fact the volumes on these exchange are more than Equity cash market.
It is worth looking at this market, because
a) Volumes are huge.
b) The trading is volatile & spreads are very narrow
c) The trading cost is very low
d) With introduction of Options, Many other players will enter the market
e) Volumes will move from OTC market to this market
f) These operations are part of many bank treasuries
g) There wont be any STT in these markets
Considering the above reason,
a) Scalping is possible, by giving both bid - ask rates
b) These market cannot be manipulated hence we can trade on Macros
c) Arbitrage can be big business with many players, Depth & Lesser Costs.
It can include i) Normal carrying of underlying ii) Calendar Spreads iii) Delta strategies
iv) Arb between NSE FX & MCX SX v) Abr between FX in Indian market & NDF in Singapore
d) Algorithm trading is possible & could give better results
But It would be like pitching against Goliath's which are banks who have the might of Money, Infrastructure & also better access to orders in spot markets. But they are better equipped to trade on Phone rather than Machine