FTIN - Bursa Malaysia · 2019. 8. 13. · Malaysia pursuant to the Capital Markets and Services Act...

15/09/16

PeyShan

BURSA2120-Tin Futures BrochureOpen Size: 20cm (w) x 20.9cm (h) Close Size: 10cm (w) x 20.9cm (h)

Traded on Bursa Malaysia

FTINTin Futures

TRADE MALAYSIA’S FIRST BASEMETAL FUTURES CONTRACT

CONSERVATIVE - STA

BLE IN

CO

ME

BALANCED - IN

COME

& G

RO

WTH

WHICH TYPE OFTRADER ARE YOU?

THERE’SSOMETHINGFOR

ONBURSAMALAYSIAEVERYONE

Every trader has different goals, and your approach to achieving them depends on your risk/return appetite.

You can find your trader type on this chart and then see what other products you might consider having in your portfolio besides the one in this brochure.

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FTINMALAYSIAN USDTIN FUTURES ISNOW AVAILABLE ON CME GLOBEX• GlobalAccess• RegulatedTrading• LeveragedTrading• BenefitofBullandBearMarket

FTIN TICKER CODE

• CMEGlobex®: BMD\FTIN\relevant contract month code Example: BMD\FTIN\DEC16

• Bloomberg: FTIAComdtyCT<GO>

• ThomsonReuters: <1FTIN>+<MonthCode>+ <YearCode> Example: <1FTINZ6>DEC6contract

®

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FTIN is a US Dollar (“USD”) denominated tin futures contract traded on

BursaMalaysiaDerivatives,providingmarketparticipantsexposuretotin

price movements.

• ContractSize:EachFTINcontractisequivalentto1metrictonneoftin

• Pricing:ThepricingoftheFTINcontractisbenchmarkedagainstthe Kuala Lumpur Tin Market (KLTM)

• CashSettled:Thereisnophysicaldeliveryasitisacashsettled contract.

1WHAT IS FTIN?


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1. Global Access

FTINistradedelectronicallyonCMEGLOBEX®, a global electronic tradingplatform.AssessingCMEGlobex® is easy and allows individual and professional traders anywhere around the world to access all BursaMalaysiaDerivatives’products.

2. Regulated Trading ThetradingoftheFTINcontractonBursaMalaysiaDerivativescomesundertheregulatorysupervisionoftheSecuritiesCommissionofMalaysiapursuanttotheCapitalMarketsandServicesAct2007.

Margin deposits and payments relating to settlement of futures contract areguaranteedbyBursaMalaysiaDerivativesClearingwhiletheconduct of the futures brokers is also regulated.

The regulatory framework provides the added protection and comfort to market participants.

2WHY TRADE FTIN?

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3. Leveraged Trading

In the futures market you will need to deposit a small percentage of the notional value of the contract (known as the Initial Margin). This margin will fluctuate according to the volatility of tin prices. The “leverage” allowsyoutohavegreaterexposuretotinatafractionofthetotalvalue.

4. Benefit from Bull and Bear Market

Unlikepurchasingan“asset”basedontoday’sprices(e.g.stocksor physical assets), a futures contract enables you to take a position now based on your view of the prices in the future. Traders have the opportunity to sell first in declining markets and this is the main tradingadvantageoffuturescontracts.Itallowstraderstheflexibilityinparticipating and taking opportunity in market trends and movements.

Forexample,ifyouwishtohaveexposuretotinandanticipatethetinprice will go down in the future (e.g. in December), you could sell a Decemberfuturescontractnowtolockintoday’sprices,andtakeyourgainsinDecemberwhenthecontractexpiresatalowerprice.Thisability to “sell” a contract without first having to buy it enables you to benefit from both downward and upward movements in price.

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InitialMarginistobedepositedwithyourlicensedFuturesBrokerpriortotrading.AllcurrencydepositsforFTIN(exceptUSDollar)forInitialMarginaresubjectedtohaircutratesasdeterminedbyBursaMalaysiaDerivativesClearingfromtimetotime.

While Variation Margins are in US Dollar (USD), Initial Margins are accepted in various currencies listed below:

• MalaysianRinggit(MYR)

• USDollar(USD)

• BritishPound(GBP)

• Euro(EUR)

• HongKongDollar(HKD)

• JapaneseYen(JPY)

• ChineseRenminbi(RMB)

• SingaporeDollar(SGD)

• AustralianDollar(AUD)

PleaserefertoyourFuturesBrokerforotherapprovedcollaterals.

3MARGINSANDAPPROVED CURRENCIES

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4 TRADINGEXAMPLES

Scenario 1 –HedgingAgainstPotentialPriceDecrease

Spectre Ltd. is a tin mining company. They supply tin to all smelting companies.Theyareexpectingtoproduce20metrictonnesoftinin Year2017.

Assumingthecurrentdatenowis1stJanuary2017andthepriceof tinisUSD17,000permetrictonne.Spectreisexpectinga30%increase oftinproductioninYear2018whichwillcausethepricetodecreasetoaboutUSD16,000permetrictonne.

What can Spectre do to avoid the company from having lesser profit in oneyear’stime?

January 2017: Sell20January2018FTINcontractsat USD17,000/metrictonne

January 2018: Buyback20January2018FTINcontractsat USD16,000/metrictonne

*OneFTINContract=1metrictonne TotalProfit=[(USD17,000*1)-(USD16,000*1)]*20=USD20,000* The company can use the profit from FTIN to cover for the losses of physical tin* Initial Margins are to be deposited prior to trading*Transactioncostshavebeenexcludedinthisexample

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Scenario 2 – HedgingAgainstPotentialPriceIncrease

TinSmeltersPte.Ltd.isatinsmeltingcompany.ThecompanyintendstopurchasetinfromQuickTinSdn.Bhd.,atinminingcompanyinMalaysia.

AssumingitiscurrentlyJanuary2017andthecurrenttinprinceisUSD17,000permetrictonne.TinSmeltersPte.Ltd.hasreceivedanorderof50metrictonneswhichneedstobedeliveredinSeptember2017.TinSmeltersPte.Ltd.anticipatesthatthetinpricewillrisetoUSD17,500bySeptember2017.

HowcouldTinSmeltersPte.Ltd.useFTINtomitigatevolatilepricemovements?

January 2017: Buy50September2017FTINcontractsat USD17,000

September 2017: Sell50September2017FTINcontactsat USD17,500

*OneFTINContract=1metrictonne TotalProfit=[(USD17,500*1)-(USD17,000*1)]*50=USD25,000* The company can use the profit from FTIN to cover for the losses of physical tin in September * Initial Margins are to be deposited prior to trading*Transactioncostshavebeenexcludedinthisexample

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Scenario 3 – Arbitraging

AtradinghouseobservesthattheFTINpriceonBursaMalaysiaDerivatives is trading at a premium compared to another futures contracttradedatExchange“X”.ItdecidestosellFTINandbuysanotherfuturescontractfromExchange“X”toarbitrage.Thepositionwillbeliquidatedlateroncethespreadofthepricesbetweenbothmarkets returns to normal. The trading house will benefit from the temporarypricediscrepancybetweenthetwoexchanges.

*Initial Margins are to be deposited prior to trading*Transactioncostshavebeenexcludedinthisexample


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Equity Derivatives

• FTSEBursaMalaysiaKLCIFutures(FKLI)

• OptionsonFTSEBursaMalaysiaKLCIFutures(OKLI)

• SingleStockFutures(SSFs)

Financial Derivatives

• 3-MonthKLInterbankOfferedRate(KLIBOR)Futures(FKB3)

• 3-YearMalaysianGovernmentSecuritiesFutures(FMG3)

• 5-YearMalaysianGovernmentSecuritiesFutures(FMG5)

• 10-YearMalaysianGovernmentSecuritiesFutures(FMGA)

Commodity Derivatives

• GoldFutures(FGLD)

• USDTinFutures(FTIN)

• CrudePalmOilFutures(FCPO)

• OptionsonCrudePalmOilFutures(OCPO)

• USDRBDPalmOleinFutures(FPOL)

• USDCrudePalmOilFutures(FUPO)

• CrudePalmKernelOilFutures(FPKO)

5WHATOTHERPRODUCTS DO

WE OFFER?

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Step 1OpenaFuturesTradingAccountwithalicensedFuturesBrokerofBursaMalaysia Derivatives.

Step 2DeposittheInitialMarginwithyourFuturesBroker.

Step 3 Start trading FTIN.

How do I learn more?PleasecontactyourpreferredlicensedFuturesBrokerwhowilladviseand update you accordingly. You can also attend the various educational seminars listed on Bursa Malaysia’s website.

GETTINGSTARTED6

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BURSA MALAYSIA BERHAD

Exchange SquareBukit Kewangan50200 Kuala LumpurMalaysiaTel : +(603) 2034 7000Fax : +(603) 2026 3584Email: [email protected]

www.bursamalaysia.com

Disclaimer

This brochure has been provided for general information purposes only. The information contained does not constitute financial or trading advice and neither does it make any recommendation regarding the product/s mentioned herein. Although care has been taken to ensure the accuracy of the information within this brochure, Bursa Malaysia Derivatives and Bursa Malaysia Group does not warrant or represent, expressly or impliedly as to the accuracy or completeness of the information herein. Bursa Malaysia Derivatives and Bursa Malaysia Group further does not warrant or guarantee the performance of any product/s referred to in this brochure.

All applicable laws, regulatory requirements and rules, including current Rules of Bursa Malaysia Derivatives and Rules of Bursa Derivatives Clearing should be referred to in conjunction with this brochure. Bursa Malaysia Derivatives and Bursa Malaysia Group do not accept any liability for any financial or trading decisions made by the reader or any third party on the basis of this information. You are advised to seek independent advice prior to making financial or trading decisions.

FTIN - Bursa Malaysia · 2019. 8. 13. · Malaysia pursuant to the Capital Markets and Services Act...

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Transcript of FTIN - Bursa Malaysia · 2019. 8. 13. · Malaysia pursuant to the Capital Markets and Services Act...