Mainly because recently the market volatility is high and also the index is facing huge resistance at 1390 level, has tried several time but not succeed, so discount a bit if anything goes wrong in overseas market. But a few point only, not significant, nothing to shout about. If market can stablise or creep a bit higher then the FKLI will close the gap eventually, still got 3 days to go for the JUL contract, anything can happen in this 3 days especially nowadays, market volatility is so high.

Current in KLSE, the shinning stars are those second and third liners and 'goreng' stock. Big cap like TNB, TM, Genting hardly move much nowadays.

I don't denied it somehow like gambling also but it depends how you treat it. Also, trading with FKLI, you need to make some study, not blindly sell or buy into it, otherwise, surely lose one. You need to monitor the index linked counters performance, not simply look at the index alone. See the counters like TNB, Maybank, MISC (index linked) etc are expensive or not. If too expensive, you can short the market since there is not much room for the upside, high probablity will have some correction. If the particular stocks are cheap and lot of fund are buying it, then you go long for the market. It is not simply trading with one day, hope when you bought then tomorrow goes up. You look for the bigger pictures and others factor like overseas market, interest rate issues etc. Also TA can be applied when trading with FKLI, at least you have some idea before trading, not simply buying or selling blindly.

Also when you bullish about the market and overall market is cheap (aka most stocks are cheap) and don't have any idea which stock to choose then you can opt to buy the futures, even when expired, roll it to next month (even roll for several yeras) then you basically are buying the index instead of buying stock, you still achieve the effect of buying stocks, gain from the market bullishness.

You can also use it tp hedge against the market, like you have plenty of index-linked counters, instead selling the shares, you opt to sell in the futures to protect your portfolio, this is more applicable to fund managers and big retailers who has plenty of shares across the index-linked counters.

Basically when you buy or sell in FKLI, you are basically buying/selling 100 stocks of the index linked stocks based on the weight ratio respectively.

It depends how you treat it. Even for stock, a lot of people treat like gambling instead of investment, just people not realised or admit it. Typically a lot of retailers heard some rumour of ABC 'goreng' stock will go up next week, without any research about the company just look at the price quote of the computer and daily price movement, they also bought the shares already, hope it will go up tomorrow or next then can make quick gain/contra gain from it. This also quite similar to gambling already, may be speculation is more suitable word.

This post has been edited by cherroy: Jul 29 2007, 03:48 PM

But study is a must, it increases the chance of winning though not 100% or 90%. At least you know what are you doing rather blindly jump into it.

Just like sport, you need plenty of training, although doesn't mean necessary winning but without training, your have no chance or less chance of winning even you are talented.

Yes, 1 point = RM50

so one contract mean gain/loss = 2,850

It is hard to play in this market now, it is not up to the KLSE alone, the world market is influenced by the US market. With subprime issues keep on popping up and surfacing, you don't know when it will stop. Today the an Australian Macquire issue warning about fund loss and the near collapse of The American Home added salt in the wound.

Europe is expecting to open with significant loss after yesterday sharp rise and for time being, DJ futures is expected to trade down more than 100 points loss.

Now the most important is you have enough 'bullet'

That's why I keep on mentioning on previos posts, always keep enough cash to prepare for the worst.

I won't play in this market currently, too risky, each day is different now, it all depends on US market now. No news, market goes up, got subprime or credit crunch issues stock plunge.

If you notice careful of last night DJ, the 150points is only occured at last 20 minutes of the session, prior 30 minutes before the close, the DJ is hovering at neutral point to slightly red. So it is pre-mature to say the whole market is stablise already.

This had been done back 1997 financial crisis, hedge fund short the equities and respectively country currency simultaneously since they know they exit the market in big way as well as short the market which increase the currency downward pressure.

That's why until now KLSE is not permitting openly short selling of stock, only regulated short-selling allowed. The market is simple too small compared to the hedge fund size.

Currently, when market tumble, ringgit goes down as well so may be it is the sign of some 'hot' money moving out currently.

As far as I knew, there is no online portal can trade FKLI yet.

1. Min 1 contract.

Initial margin varied from time to time, last time as low at Rm1,800 per contract, and as high as Rm6k+ at one time during market turbulence time.

Mr A earn nothing from it, as he didn't close the open interest aka he didn't sell the long contract at all.

Price movement doesn't dictate your loss or gain. It i your transaction aka buy and sell price aka a closed transaction sell-buy price that is your final result.

Yup

Buy first -> long
Sell first -> short

1. Not like that. On the end of the month, contract will be settled if your have open contract not close, by using the settlement price of the last trading half hours, aka they will take average price of the last hour to determine the settlement price.

If you continue to have interest on short side, you can short the May contract, aka roll over your April contract to May.

Software doesn't work a lot of the time especially in current environment.

Because software is designed based on pattern and TA input which if market behave accordingly, then it will be correct, aka software is rigid, not flexible when sending signal.

But you and me also know market always tend to behave unpredictably.