Feb 7 2009, 04:47 PM
I have a few questions, I'll list them down:
1. Is there like a minimum I have to buy or something? Like in stocks, we have to purchase 1000 units at a time, is there any such thing in Futures?
2. In Crude Palm Oil Futures (FCPO), the underlying instrument is the Crude Palm Oil itself. So if I don't sell by the settlement date, I get a few tons of Crude Palm Oil shipped to my house. In KLCI Futures (FKLI), the underlying instrument is the KLCI Index. So if I don't sell the contract by the settlement date, what happens?
From what I read, FKLI is a Cash-Settled Futures Contract, but what I can't find is what happens if I don't sell an FKLI contract by the settlement date.
Would appreciate it very much if someone could help me understand this.
Edit:
I got the answer for question 2. Still no idea on Question 1.
QUOTE(OSK Investment Bank)
What is stock index futures contract?
Stock Index futures contract is an agreement between a seller and a buyer to respectively deliver and take delivery of a basket of shares which makes up the stock index, at predetermined price but at a specific future date. However, almost all Stock Index futures contracts (and similarly FKLI) provide for cash settlement in lieu of actual delivery of the basket of shares. The KLSE CI futures contract is a stock index futures contract that is based on the KLSE CI.
Stock Index futures contract is an agreement between a seller and a buyer to respectively deliver and take delivery of a basket of shares which makes up the stock index, at predetermined price but at a specific future date. However, almost all Stock Index futures contracts (and similarly FKLI) provide for cash settlement in lieu of actual delivery of the basket of shares. The KLSE CI futures contract is a stock index futures contract that is based on the KLSE CI.
This post has been edited by DeniseLau: Feb 7 2009, 05:15 PM
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