Everyone seems to be talking about stock market, I will start a thread that very few people know which is the "Futures and Derivatives" Market.

Let me expose everyone to a new type of market... however before I begin read the disclaimer.

Disclaimer

1. if you so choose to invest in this market please ensure you have the requisite knowledge and seek proper and necessary advise before proceeding. P

2. I am merely exposing everyone to a new topic for knowledge, any comment and/or solicitation that I make do not represent the views of my company and I do not speak and/or write on behalf of my company.

3. If you so choose to invest in the "Futures and Derivatives" market, please do proceed at your own risk.

4. For the sake of clarity and the clear any doubts, this is not a "MLM, get-rich-quick, referral programs and pyramid schemes."

For everyone's information...

This market carries one of the highest risk in the investment market, taking into account Stocks, Unit Trust, Savings and etc... It can make your instantly rich and of course poor in a matter of minutes, because prices change every 10-30 seconds.

There are 3 main products in the market namely...
FKLI (bechmark KLCI)
FCPO (FPKO) (Palm Oil & Palm Kernel)
KLIBOR (Interest Rates)

Forex?
If your guessing is FOREX part of Futures and Derivatives the answer is Yes.

Forex is not traded in Malaysia due to Bank Negara's control over Forex Market, The Malaysian Ringgit is not traded globally nor recognized. Therefore, each time if you were to buy a foreign currency it is convereted to i.e. RM ---> USD ---> GBP and vice versa.

Comparison of Forex to other Malaysian Future market products put Forex at the highest end of the risk scale, currency flactuate and volatility due not only to economical but world economical factors.

For more Information Visit

Bursa Malaysia General Info and Web Site:
http://www.klse.com.my/website/bm/about_us/

Bursa Malaysia Derivatives Products:
http://www.klse.com.my/website/bm/products...erivatives.html

Bursa Malaysia Derivatives Trading Hours:
http://www.klse.com.my/website/bm/trading/derivatives/

Bursa Malaysia Derivatives Broker's List
http://www.klse.com.my/website/bm/brokers/...of_brokers.html

For everyone's information there is only 14 Futures and Derivatives broker's in Malaysia.

Need more details you can IM me or discuss on this open thread.

This post has been edited by aurora97: Sep 24 2009, 12:52 PM

whats the return like?

Return for Futures and Derivatives estimate 30% for the yr 06 and 07. <EDITED

Example
Take FKLI (Bechmark KLCI)
0.5 tick/point = Rm 25
1 tick = Rm 50

If the FKLI were to surge 10 points that would be Rm 500 gain and vice versa.

Not suprisingly if the market were to go against you, you can lose more than you have invested in the market.

It all depends on the volatility of the market.

See a Future broker representative near you for in-dept details.

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Added on January 2, 2008, 2:16 amTrading in Futures and Derivatives...

General Requirement
1. 18yrs old at the date of agreement
2. IC + 3 months Pay Slip/ Be Form/ Form J/ 3 months Bank Statement
3. A Future Broker Representaive
4. Rm 10 Stamping Fee

Account Opened?
1. Initial Margin is Rm 5000 (i.e. deposit)
2. Margin Call is T+1 (instead of being T+3 like securities)
3. All transactions are settled at end day by brokerage
4. Margin call is at 8:45am, payment must be made before 12pm.
5. Instructions/orders/Trades can be placed Online or by Phone.
6. End day you will receive a daily activity statement and end month you will also receive a monthly activity statement

This post has been edited by aurora97: Jan 2 2008, 09:08 AM

when does margin call activated? i mean one's alrady got 5k in d acc, so in order it to activated, one's need to lose 100point?

ill b tradin in fkli within this year.. now still learnin its rules n regulations...

thanks for opening this thread

btw, klibor is not active rite? coz i saw vry few share been traded i think..

Margin call is activated if there is loss at the end day, the following day you will need to top up the balance. If there is gain on realization than your entitled to make a withdrawal.

Yes, lost of 100 points will completely wipe out your Rm 5000 but normally there will be a stop lost requested by the client if it drops 4-5 points depends how much risk you want to take.

3 main products in the market
FKLI
FCPO
KLIBOR

Normal Retail clients i.e. individuals would trade either FKLI and/or FCPO. Only banks (or like we call them institutions) go for KLIBOR.

Future transactions are know per contract basis.

The uniqueness of futures is that you invest in "Contract Months"

FKLI = you can trade up to 3 months in the future (includes current month)

FCPO = you can trade up to 3 years in the future (includes current year i.e. this year 2008 so you can trade up to 2010)

Delighted your interested "Low Yat 82" keep the questions rolling, its still a wilderness out there the Futures Market unlike equity.

Want to know a secret? The Commission rates/brokerage rates are actually lower than Equity market

This post has been edited by aurora97: Jan 2 2008, 09:24 PM

ic.. thanks for d info..

btw, does it nescessary to maintain d account wit 5k min?

huuhuh... ya kah lower?...

wat i jus noe it will b better... no handicap war..can long can short.. also need look at 1 chart onli...

i heard b4 something ab spot n next month contract... so i guess its wat u mean by trade up to 3 months in the future (includes current month)

btw, if roolover, does it invovle any charges?

5k is actually determined by the future houses, being one of the best in the industry our company is able to demand a higher requirement. You not only get daily commentaries, research, guides but most importantly experience traders whom have been in the industry since its initiation.

Long = buy
short = sell

there is a lot of technical analysis and charts i.e. trading forex required to fully comprehend the futures market, I am more towards fundamental and my knowledge is leaning towards FCPO.

FKLI do not have spot month only commodities such as FCPO have spot month, FKLI are cash settled at the end of the month if you have not closed all your positions.

FCPO spot month is every 15th day of each month.

Than you come to the question of position limit.

FKLI= max position you can hold in a month is 10K

FCPO =
Spot Month = 500
Non Spot Month = 5000
Total all positions added must not exceed 8K.

Roll Over..
Closing a the current expiring position and opening it in another month at the same price will inccur standard brokerage charges.

So far I have yet to see any retail clients hold any positions that long, normally only institutions does it.

icc
oo.. u mean every 15th day of each month, u need to cash settled or roll over?

hmm...y retail clients dun wan to rollover? i thought 1 month or less is so difficult to trade... mayb need buy n sell within 2weeks +-...

lol you trying to jumble everything together?

FCPO
1. Only FCPO has spot month

2. FCPO spot month is on the 15th of each month, in this spot month period your only allowed to hold 500 contract maximum.

3. This is because spot month means delivery month, tendering will begin after the 20th day of the month. So if have any contract/ position you will end up with 25 tonnes of FCPO.

i.e. 1 contract = Rm 3100 = 25 tonnes = Rm 77500 this is the price you will need to pay during delivery.

4. You can choose to rollover your position before the expiration on the 15th day of each month.

FKLI
1. Cash settle at the end of each month

2. Roll over prior to expiry

I believe retail clients do not rollover their position as they would rely heavily on day trading to take advantage of the low commission, gaining 3-4 point a day and profit taking as soon as there is any spikes.

Retail clients dont hold position because in order to mainatain your position you will be required to constantly top up to maintain a position, unless your absolutely sure that that position will be profitable in the coming months. Otherwise, holding a position will bleed you dry.



This post has been edited by aurora97: Jan 2 2008, 10:35 PM

ic... those all commodities r workin in this way?

still need sometimes to digest..lolz

The concept is the same, but the volatility compared between FKLI and FCPO is worlds apart. Apart from the month difference FCPO is a very volatile product in the market, just last month it was hovering around Rm 2,900 than out of the blue it spiked up to Rm 3,100 thats a 200 point gain (guess how much you won?).

Likewise, FCPO is known to be the biggest killer.

if not mistaken its been havin huge volume few months back... when inflation starts to pick up...

errmm for FCPO the best benchmark is crude oil prices, as consumption spikes in Summer and also December the demand for FCPO spikes i.e. throughout Sept, Nov and Dec we have seen record high prices for FCPO at first breach 2700 to go all the way to 3100.

The hype all about biodiesel as well has caused FCPO prices to surge ahead, so not besides the cooking oil industry fighting for a share of palm oil you have biodiesel coming in.

Many factors fundamental is one market factor you would wanna keep at the tips of ur hand when u trade.

aurora97..ur company provide such services?

yes we do, we are actually an investment bank's subsidiary..

Our company specializes in FCPO and also FKLI trading.

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Added on January 3, 2008, 9:34 pmlow yat 82

By the way, roll over is also known as a spread trade.

simultaneous buy and sell but in different months is called a spread.

Retailers/individual investors do not use the spread method very frequently because you need to constantly top up to maintain a position.

Retailer/Individual investors normally focus their attention the beginning of the first 2 weeks of the month, whilst Institution will normally appear to be more active at the end of the month because they constantly roll over their position to the next month.

Retailers normally stay clear at the end of the month due to volatility cause by institutions trading in large number of lots causing market to flactuate unpredictably.

This post has been edited by aurora97: Jan 3 2008, 09:34 PM

@aurora97

for fkli, cash settle is means wat?

let say its at 1400, so cash sttle is 1400*50= 70000? @.@

that is if you buy 50 contracts of FKLI, at end of the month it will be cash settled. If you make a loss you will have to pay a difference and vice versa.


FCPO is abit different.

say Rm 3100 X Rm 25 per tonne per contract = 1 contract = Rm 77500

this is the settlement price (which excludes delivery)

ic... but isnt it 1 points is rm50? so if 1400points d value is not 70000?

or u sayin 1 contract = Rm (1400)klcipoint?

i will b venturin in futures in 1-2weeks time

What he/she posted one is FCPO, not FKLI.

In FKLI the cash settlement at the end of the month, they will take the differential points difference to realise your loss or profit and close the particular contract ie. the contract is fully settled.

Eg. you bought FKLI at 1400 then you hold it until the end of the month (aka didn't close the contract, we called open contract/interest), the month end last 30 minutes average will be used to compute the cash settlement price, let day 1420.
Cast settlement price is computed using minute by minute KLCI (KLCI changes every minute), they take 30 data of KLCI, ditch out the highest and lowest, left 28 and using the 28 data of KLCI to average it.

Gain 1420-1400 = 20 x Rm50 = Rm1000 gain. If short at 1400 then lose RM1000

Commission bought first bought at 1400 = Rm25, cash settlemt charges Rm1*.
*If you let the contract settle itself, only a symbolic Rm1 charge but if you sold it to th market to close the contract, Rm25.

So net gain = Rm1000 - 25 - 1 = 974. For short at 1400, loss = 1026.

PS: Don't need to use Rm50 x 1400, it is somehow meaningless, as trading in FKLI, you try to gain through the differential between buy and sell or short or long.

Cheers.

This post has been edited by cherroy: Jan 6 2008, 09:14 AM

spot on...