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.

---

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...

oo.. thanks.. wow... d charges so minimum..


btw, i've read a book stated that futures's volume n open interest is actually 1 day lag.. is it true also for malaysia futures market?

Err... the charges is as follows

I won't give the exact commission rate but it is lower than equity ^^, but the exchange and clearing fees are correct.

FKLI
Rm 100 (Rm 95[commission]+ Rm 5[exchange 4+1 clearing]) per side/per way

FCPO
Rm 100 (Rm 97+ Rm 3 [exchange 3+1 clearing]) per side/ per way

Per side/Per way is one transaction

Round Turn is one transaction back anf forth.


btw, i've read a book stated that futures's volume n open interest is actually 1 day lag.. is it true also for malaysia futures market?

can you eleaborate further?

Cause to my knowledge everything is electronically traded and real time, there might be some delay of data transmission but the trading system updates it self every 10-30 seconds.

accordin to d books, it stated for futures, i.e. yesterday data for volume n open interests, will b given out today...so its 1 day lag...


hmm... about d commission, i think ill ask my remisier tomolo...

ah ok your right on that if you say compilation of data, everyday i see that report and i didnt know what you were talking about... lol oops..

I can see volume, open interest, market share, daily trade statistic but all information are for the previous day so delay by 1 day.

I will tip you of to see whether your rate is alright thats the best i can do for u.

shortin time for FKLI? not yet IMHO... still no confirm sign FKLI is goin down... uhuhuh... hopefully that time i already open acc. ^.^

FKLI has breach 1500 for Jan 08 ceiling once it goes up, now is a super bull already i think its kind of too late to do anything but still can consider. Normaly acc opening is very fast, if all ur documentation is sufficient and u have deposited the inital margin. Can trade the next day or even immediately.

Oh by the way CPO now at 3200, plantation companies shud be making tonnes by now.

super bull? wats ur supportin point? IMHO, US problem has drag for quite sometime d... FED keep cuttin interest rate to avoid resession (since interest rate goes down, dollar goes down, means commodities goes up)...all commodities will shootin high up d sky... US problem will drag every1 goes done...

IMHO when GE is announce, d market will slide down till GE over..

im waitin to short d market...but need clear confirmation from klci 1st...

i still not call my remisier yet ab d commision

This is a just normal bull of KLCI, not the whole market. Only 1993-1994, and the 1Q 2007, we can consider as super bull, now? far from a actuall super bull.

Volume accompanied with the new high of KLCI is so so only. One of the main reason of KLCI is breaching new high again and again is due to CPO as heavy weight plantation like Sime, IOI, PPB, KLK are the major contribution of KLCI new high, others components are Ok only, not super bull type of run. See where is TM, Tenaga, Maybank, Plus, fall from its 1994/1997 high. Currently it is much more sectorial not overall. You need a overall economy booming with GDP growing at full pace to stage a real market super bull.

No doubt, super bull is applied to CPO.

This post has been edited by cherroy: Jan 10 2008, 10:08 AM

I agree with you on the part plantations sector is leading the charge, but we are looking at the "Overall market" not isolated industries comparison if you refer to the KLSE index its at a 10 year high breaching 1500 barier.

Fyi this is a super bull for the futures industry, since we do not look at stocks but the performance of KLSE as a whole.

To be precise, it is the top 30-40 index components are having a super bull not entire KLSE market. Most people won't disagree on this if you go to the stock market section to chit chat. Yup, no doubt, if look solely on futures alone, all are under super bull run, FCPO, FKLI, but to say KLSE entire market is having super bull run is a bit pre-mature and not exactly the right picture of it.

This post has been edited by cherroy: Jan 11 2008, 09:50 AM

Well explained, I get where ur going at.

Take note...

So for clarification sake, its safe for me to say that FCPO and FKLI is currently experience a super bull and not KLSE for the reocrd.

within today, KLCI fall 60+ pts, Hang Seng fall almost 2000+ pts, nikkei fall 5.65%, the whole asian stock markets is tumbling like no tomorrow,
should i name it super bear?

sorry, i'm newbie in shares, thanks for info in the previous posts, really appreaciate it, need sometime to digest...

Generally in market taught, a drop of 10% is considered a correction, a 20% drop is considered into the bear territory already. KLSE has not (yet) drop 20% but others major bourses already in it.

malaysia bear will only come out when CI touching 1,200 level!

*assuming 1500 level minus 20% (as per what cherroy described)
*currently is just a "correction"...

ha~ couldn't find this thread the last time i checked.

guess my questions have been answered, albeit partially. I'm a fresh grad with a major in finance but the funny thing is we are taught more on the fundamentals of the financial instruments and nothing much about the trading part of it.

see i understand how the transaction and p/l are calculated but i'm seriously at loss as to how or whom i should look for regarding the opening of account for trading of futures. bah~ have been doing some equity trading for quite some time and it's simply frustrating not being able to do something when the market head souths.

adrian,
as a fresh grad who is still hunting for job, i definitely don't have a payslip to show but is it mandatory? I'm not trading using the margin facility and do I have any problem with the opening of account if I place less than 5k worth of deposit in the bank?

Don't trade until you are fully aware of the risk behind. It is much more risky than trading shares, bare in mind. 5K, 10K per Contract/lot trade can easily be whiped out overnight if market is against you.

 7_of_2008_Margin__FKLIOKLI_.pdf ( 76.07k ) Number of downloads: 189
 8_of_20087_Margin__FCPO__FPKO_.pdf ( 76.08k ) Number of downloads: 136


I took the liberty to attach the initial margin rates effective from 22nd Jan 08 to 25th Jan 08

He does have a point, on the other hand of course taking big risk also have big returns otherwise we wont be trading into the future. It could be 10K profit as well right?

by the way if the market drops more than 20% it will automatically trigger a circuit breaker meaning that the entire market will be suspended for that particular day.

This post has been edited by aurora97: Jan 22 2008, 06:58 PM

^^ Thanks for the concern.

I just want to have the options to short on futures as a hedge on my portfolio during the bear run as I'll still be keeping my portfolio intact during the duration. And trading in shares/warrants too has its own risks.

huhuh.. those shortin klci must b laughin rite now...

haizz... so sad... not manage to open futures acc. in time

It's no problem actually just produce your 3 mths bank s/m or savings book will suffice. You don't need to park RM 100,000 just to show that you can invest in futures, even with RM 1 we will buy whatever reason you give.

This is a common misunderstanding among many ppl that you need to have the money in the bank to invest in the futures makret, actually we need your savings or bank s/m just to verify your identity i.e. extra precaution.

If I walk in and just open account but never trade in futures thats fine, just leave the account dormant doesn't matter.

But when and you so choose to take a dip into the futures market that you should refer to the initial margin rates that i have posted in PDF format.

example the current inital margin rate is RM 5,000, than you will need to deposit 5K before you can start trading (only when you want to trade)

I have been scouting around on ways to open a futures account for some time ever since I got back from Aust. The time is not with me, but let's hope it will come again (some people who trade in equities will be cursing at me right now. lol.)

Adrian,
could you elaborate more if I can open a futures account with less than 5k deposits. My liquid assets is worth less than that at the moment

Ok what i meant was:

1. Say in your bank now you only have Rm 1

2. We require 3 months bank statement

3. So you produce 3 months bank statement

4. We open you account (suprise!)

5. Account opened for futures trading

Say you want to start going active and trade futures:

1. Refer to the initial margin table

2. FKLI initial margin is Rm 5,000

3. Deposit Rm 5K with Futures Broker

4. Start Trading Futures.

He/she just a fresh grad, might not (or might) have real experience how it would be like. We have traded a lot in the futures and shares market adn fully aware how much risk we can afford but for someone new, they might not fully aware potential risk behind (potential return might be). We wouldn't like to see fresh grad makes a wrong move then suffer. New faces generally is more 'brave' and bold in their move due to lesser expose and understanding the risk. Some may knows 5K can trade the futures, but not aware you can lose 10K or more, not 5K alone.

10k can be small sum for someone but a big deal for others.

Just a reminder, not mean discourage or anything.

Happy learning and trading.

Point taken.

noted.

thanks cherroy. =) with that sum of money, i guess i'll just open the account and stick around to watch longer. I might be a bit stubborn headed at times, but still, experience is the best teacher I could afford now. No one around me seems to be good or know futures trading. Money I poured in here are the monies I earned working part time in Aust. It shall be a lesson for me regardless of the outcome.

still, both your concerns are much appreciated and I hope you guys don't mind if I snoop or ask around clarifying a few points with you guys in the future.

With no knowledge and practicals on using short futures, I have to be more alert with the equities activities and some how, I managed to unload my portfolios 2 days back locking in some gains before the market went south.

---

Added on January 23, 2008, 12:11 amjust 1 thing, it is regarding the attached documents on the quotes for FKLI. I have seen the term spot month spread and I have a rough idea how to apply the figure into the calculation, but back month spread? Mind putting some pointers for me there?

This post has been edited by jimmyttl: Jan 23 2008, 12:11 AM

Glad to help as far as we could. We come here to share out knowledge, information and experience which only will benefit all of us.

The points spread mostly reflect the sentiment and trend of the market. Locally, the futures market is not that matured, sometimes big players can manipulate up to certain extent, as FKLI market is relatively small compared to matured market overseas.

Like me I am also here to share my knowledge with everyone but from a future broker's officer point of view, if i am able to I will invite a trader to speak on forum.

Many ppl have a view that the futures market is offlimits to individuals and only to financial institutions but this mentality and concept is wrong.

Further, the other mistaken perception is people tend to lose interest because of the procedure attached in account opening. I want to clarify this point so that ppl who indeed have knowledge in the futures market, know how to proceed without being bogged down by all this worries.

Our company posses one of the toughest conditions on account opening, I can help you navigate through the minefields of red-tape and also abit of tips and tricks on commission rates

Futures is a very unknown and vague territory for many including me, although i do suggest you open an account and make use of the Future Broker Electronic Trading Facility (something like HLEBroking) to monitor the Futures Market. There are no strings attached, certain brokerages offer this service for free.

Spread?

Spread (aka short or long roll-over) normally individuals/institutions will roll their (open) position to the next following month when products (i.e. FKLI) near their expiration month.


Actual Trading Practice

Explanations to why Individuals don't use spread much...
This happens always 3 days to 1 week before expiration, individuals usually will avoid this month because its highly volatile. There is no sufficient individuals aka speculators in the market to have a level playing field against institutionals who can trade upwards of 100 contracts to 1000 contracts. So when they rollover this contract everyone will feel the ripples of their movement.

I have seen individuals used spread but the return takes time and patience and alot of monitoring of forward months, in futures they only want to do it fast and furious in and out without holding any position for too long. Not a matter of maturity on the contrary.

This post has been edited by aurora97: Jan 23 2008, 01:23 PM

It depends on individual, if one has some good history of financial creditibility, it doesn't require much information or red tapes, just sign up the opening account application form and paid Rm10 for stamp duty then viola, next day can trade already as my case when I open the futures trading account.

Locally, using spread to gain is difficult because relatively low liquidity or volume, most concentrate on spot month, others forward month contract bid and ask can be too far sometimes and with low volume only. You need 2 way of trade to gain through the spread.

In US, it is much easier to do and when opportunities come one can always use arbitrage for some small and quick gain.

Eg. if a portfolio manager is holding of 100 KLCI component stocks with KLCI index at 1350, while FKLI is trading at 1310, the managers can dispose the 100 stocks then buying the equivalent amount money/value of FKLI at 1310. In this way the manager can straigh away make a profit of 40 points while its holding value still remains unchanged. That's how you do abritage trading and using the spread to make quick and automatical gain. Sadly to say, locally the non-diversified investment tools available here are not presenting this kind of opportunities.

---

Added on January 23, 2008, 2:31 pmYup, experience sometimes is the ultimate 'teacher'

Just remember to have high discipline when trading and trade until you can afford.

This post has been edited by cherroy: Jan 23 2008, 02:36 PM

Then I guess I'll stick around this thread for a time before I start trading.

Adrian,

I saw it somewhere as well that HLebroking does offer the facility to trade via its web portal but this is the reply I get when I email-ed the helpdesk the other day clarifying it.

Dear Sir,

Kindly be informed that we do not have Futures trading via HLeBroking website. Should you be interested to open a separate account for Futures trading, kindly liaise with Mdm Lucy Tong.

Should you require any further assistance, please do not hesitate to call our helpdesk at 603-21681000. Alternatively, you can send us an e-mail via helpdesk@hlgs.hongleong.com.my

Not any helpful ain't it. May I assume you have a futures trading account with hlebroking? If you do, mind telling me the steps that I need to take to get 1 as well?

Your definition of spread is the difference between 2 futures with different expiry date and the spread is the cost incurred in roll-ing over from 1 older futures to a newer 1 instead of closing it? Am I right? True, guess I'm nt going to use the spread much too as it involves a very long time duration and thus higher risk.

Again cherroy and aurora97, thanks for answering my queries

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Added on January 23, 2008, 2:42 pmCould you tell me if your trading is done through the internet? I am not too comfortable talking over the phone with a remisier for some reason. If it is, mind giving me a rough idea on the procedures?

This post has been edited by jimmyttl: Jan 23 2008, 02:42 PM

Sadly to say, until now (I could be wrong), I haven't seen any local futures brokers using online mechanism to trade, still using old fashioned through phone.

The highlighted in bold I would like to draw your attention to this as well, this is also a misperception many have whilst opening an account. Financial credibility is not a criteria or deciding factor whether you can trade futures, but can you staisfy the initial margin or not.


Sorry i dont know anything abt HLEbrokings futures electronic trading facilities or how you apply to open one, by the way i wish to clarify that you can only view the information i.e. flactuations in price; volume; charts; products the general stuff through such facility but not execute.

for execution you still need to go through a broker, if your uncomfortable talking through the phone try asking the broker your talking to whether he offers your MSNmessenger/yahoo, SMS (rare but there is) etc...

The Future to Futures trading?

Yes, gentleman expect in the not so distant future there will be self execution but futures will take the lead in this field. The trial has been on going at the moment, expect in the future this method of execution will spill over to the equity market and you can say Bye bye to those incompetent remisers.

will keep everyone updated

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Added on January 23, 2008, 10:14 pmAnonymous pm

" I realise that you are not in the stockbroking division but do you know a few good remisiers that you could recommend? I am somewhat new in stock investing (so I need a remisier who are patient enough to guide me) and I have RMXYZEERk to invest. "

For people who are new or have no experience of stockbroking I advise that you try and at least learn or read up books to at least gain some in-sight on how the equity market works.

Why?

I can technically recommend 10-20 remisiers without a problem...

But?

Why I don't recommend remisiers is because they earning a living from commission and if you solely rely on them for advise and guidance this is what willl happen...

Scenario 1

Commission ramming or Volume seeking remisiers, I hope there's no remisiers running around looking at this post but the truth is everyone wants to make money.

Scenario 2

Stockmarket is a very subjective matter whether its worth investing in equity or not, fundamentals and technical analysis may point to profits but the market is a wild an untamed animal.

Conclusion?

Sorry I don't recommend remisers. Better to read and learn.

This post has been edited by aurora97: Jan 23 2008, 10:14 PM

i heard some brokerage companies are implementing an online trading platform for futures

It is on the pipeline, future may be, now I don't see one yet.

actually its already being implemented but still in its infant stage, the tools are already there just waiting for clients to pen down the agreement.

at the moment and to my knowledge there is only one futures brokerage firm leading the way in this self-execution type technology, it will be en-visaged that one day equity trading will no longer require any Remisiers or middleman to execute trades.

FYI FKLI margin will be increased to RM5,600 effective end of today, can always refer here for any updates
http://www.bursamalaysia.com/website/bm/tr...ular/index.html

change in margin rates


Attached File(s)
 10_of_2008_10_CNY_Special_Margin.pdf ( 76.41k ) Number of downloads: 60

regional indices have been very volatile of late, thus we can see quite frequent change of margin not only in Msia but SGX and HKEX as well..

The margin had increase 3x since 2005.
It become more costly to trade.

we do not simply increase the margin rates, the increase IMO is justified as you can see that the contract value has grown so much with the higher index now and due to higher volatility

When index is about 900 points (2005), the margin is around 2K, now KLCI is 1,400, margin become 6K+ near to 7K. I fully understand it is the volatility make it need to have higher margin, just make a comparable figure.
As last time, I can use 2K margin to gain 2K (40 points gain), but now I need to fork out 6K to make 2K. The return rate for my money park in the futures drop from 100% to 33%.
That's why I am cooling off a bit to trade/hold futures contract recently because of potential gain rate on money park inside drop signficantly due to higher margin (can be loss as well, don't mean sure gain) besides the reason of market uncertainty.

This post has been edited by cherroy: Jan 29 2008, 02:12 PM

RM6700 is really high but it's only for the coming long holidays as Clearing House as the central counter party has to due with the undue volatility regardless of the direction the market moves, but i am pretty sure it will be adjusted downward after the CNY, but again it depends on the market volatility
on your second point of percentage, back to year 2005 when the index was trading at the level of 900+ it hardly move >20points, wasn't it so 100% gain isnt an easy target to reach
and nowadays it can easily move more than +/- 50pts, greater risk but the golden rules says, high risk high return

Yes, it makes the 'table' become bigger now due to the volatility.

Actually (just personal preference, don't mean to disagree anything) I don't quite like the word : high risk high return, in reality, if can turn out to be high risk higher loss.

sales pitchla , of course any investment also there is risk, risk is equated to your gain and also the market anyone might venture into. It is a matter of risk tolerance which varies from person to person.

But anyway I am here to keep ppl informed about the futures market, I will amend any words that is stated by me that says "high risk high return". It's not in line with keeping informed about futures market but very misleading.

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Added on January 29, 2008, 5:03 pmInformation on Short Selling...

Cut Copy and Pasted comment by Crossbone, will add on as and when required

Crossbone Jan 22 2008, 10:47 AM Show posts by this member only | Post #4


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Group: Junior Member
Posts: 125
Joined: November 2006




are you trying to imply as if short selling futures has a market of its own?

In the futures market(such as FKLI and FCPO)
you could buy/long or sell/short in the same place,there is no separate part for short selling.

Unlike short selling in stock market,which is slightly complicated,short selling in the futures market is as flexible and easy as buying,just call up your broker and tell him you wish to place a short selling order.

and thats it,you have entered a short sell position.

As far as i know,no brokerage house has an online platform that lets you trader futures,although i heard they are implementing it in the coming months.

There are some which you could view the live price online,but not trade.

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Added on February 25, 2008, 6:55 pmNew Margin Rates valid from 25th Feb to 27th Feb 08

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Added on February 27, 2008, 2:26 pmNews on US Dollar Denominated CPO contract

http://www.bursamalaysia.com/website/bm/me..._095724125.html

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Added on March 30, 2008, 4:57 pmChange in initial margin rates effective rates till 1st of April 2008

http://www.klse.com.my/website/bm/trading/...ates-280308.pdf

This post has been edited by aurora97: Mar 30 2008, 04:57 PM

I am a person like to learn the knowledge about investment, and i will feel curiously how to play futures and derivatives such as FKLI or FCPO, Can i know how to calculate the profit and payment for investment? Actually how long for the contract for FKLI and FCPO if we invest? Like today the index composite is 1041.07 points, how much money do i need to invest if i want to play for FKLI? becos i got hear many people say that 1 points for FKLI = RM 50. Can i know how to calculate?
Thanks....

You can have the answer from the earlier posts in this thread.

Feel free to ask more if any query.

Welcome but please avoid to open multiple thread.

This post has been edited by cherroy: Sep 11 2008, 08:38 PM

wrong post

This post has been edited by 2HK: Sep 29 2008, 05:27 PM

FKLI points and KLCI are different they are not the same however there is some relation to both of them. how much you need to put for the initial margin depends on your broker.

I try my best to answer..

Derivatives by its name, is derived from something else, which we often called the underlying (be it the stock index, commodities, stocks or even weather !!)

Take FKLI for example, the underlying is the KLCI and you trade the FKLI , not KLCI itself. There are usually a list of contract months for each futures contract, with different maturity.

http://www.bursamalaysia.com/website/bm/pr...ci-futures.html

Look at the contract specification of FKLI, there are four contracts month available for trading - the spot (current month) , the next month and the next two calendar quarterly months. Today is 30/9, thus the spot month will be September08 , the next month is Oct08, the next two calendar quarterly months will be Dec08 and Mar09. Those contracts will expired on the last business day of the contract month.

The main difference between trading futures and equities is that you can buy or sell a contract - the term often used is long for buying and short for selling. For instant, you can buy a Sep08 contract anytime before the contract expired. Currently the margin rate for a FKLI contract is RM4500, therefore if you long or short one contract you will need to pay RM4500 for it. You will always need to maintain this amount of margin if your position is not close off.

Then after you long/short a position you will be subject to margin call if the price movement is against you.

For example, you short a FKLI contract at 1000 point, so you pay RM4500 and you didn't close the position. At the end of the day the contract close at 1002 point. Then you lose 2 point = 2 x RM 50 = RM 100. You will have to top up RM100.

I hope I do not confuse you

Is it means

Initially when we order, we have to pay for a min of 4500. And extra at the end of contract depending on price movement. Need to top up if trend is against. What about I'm making gain?

What about rolling to the next month? How would it be then?

Yes RM4500 is the margin rate set by Bursa (latest) but the broker may charge you higher. If you make any gain from the unclosed position you can withdraw or you can leave it as excess cash, but in the end of the day you have to maintain at least a "clean" RM4500.

Roll-over I'm not too sure, that depends on your arrangement with broker i think

FKLI ? huh ? I was part of one of the founder members of this instrument.

margin way too high . better stuff o/seas , cheaper margin, bigger moves = more $$$.

Is it still that stupid black and white screen ?

wow then you must be an experienced one
KATS has retired few years back, now using PAM

Ok lah no need to kowtao lah , ngro put hai hei tchik kwai , tan chi yut kor potung yunchoy.

Generally I got no respect for the local and SG finance community - nothing coward pondans .

Eh , the screen now how ? got color ? decent charts ? indicators ?

each contract of FKLI now is rm 5000 ? the brokerage fees is rm 100 ?

during my time, which some years back, it was rm 1200 for a contract and rm 25 for the brokerage.

Threadstarter, are you from OSK ?

By the way, this is a very risky business. in a short few minutes without your realisation, you will gain and lose hundreds. To me, it is sort of gambling and till today, i still could not find any solid tools to Analise it.

anyone here trade fkli,i m a new trading ppl...play fkli since oct 08...so far some win some lose,like to day open short 4pm 892.5...close 888,small earn.

i was missed the morning(busy) ...the down trend so beautiful...but at last still have small profit just now..

btw welcome to share...tq

thought this thread was dead...

Anyway, for thos einterested in futures trading try speaking to "AdamG" u will most likely find him on the stock market v17 thread. I believe he can give a clearer perspectibve abt the futures market.

his a dual licensed holder.

its has been more than 10 years since my last trading on fkli futures. I was so unlucky to miss the bear at the time.. but it was so volatile too
for anyone interested in trading futures, my advice is to have money to lose.. if you are comfortable to lose 1k to 15k a day.. a week a month... and you have a business that constantly generating money for you... this is your play ground... futures is one the place where you can come in with few thousand and go reach the millions..
good luck..

Is this means that the cost of one contract FCPO is equal to 25 tonnes * the market prices of crude palm oil

then equal to the cost we need to pay for one contract?

1 contract = 25 tonnes
1 contract x 25 tonnes x 1625 (say CPO spot month price is) = Rm 40,625 per contract.

if u wish to take delivery, this price excludes any other cost i.e. storage, transportation, brokerage, exchange commission etc...

Keen to trade futures online ?

get more info about DMA http://www.bursamalaysia.com/website/bm/trading/DMA/
or download the handbook http://www.bursamalaysia.com/website/bm/tr...MA_Handbook.pdf

DMA Rate (online trade)
FKLI : RM 16 per way (RM32 per round turn)
FCPO : RM 9 per way (RM18 per round turn) INTRADAY
FCPO : RM 14 per way (RM28 per round turn) OVERNIGHT

anyone can get lower than above rate?

This post has been edited by asiatrader98: Mar 2 2009, 09:58 PM

Can anyone tell me, is FOREX is the future foreign exchange?

Is it OTC or exchange traded? bcoz i heard from my fren, it is OTC, but the future can't traded in OTC, bcoz of its nature of contract which is standardize rite...

Why in future only have FKLI and FCPO, how to find or trade in corn index and other commodities index?

This post has been edited by gecodine: Mar 3 2009, 10:53 AM

Hi anyone talking abaout futures anymore...?

Couple of ppl here still trading futures.
Anything u want to know?

AMBank is promoting their new real time DMA platform & offering HP™ Mini H110 netbook to their active traders. Anyone into this.