Thai
EngIndices
SET50 Index Options
SET50 Index Options is a contract that gives the buyer the right, but not the obligation, to buy or sell SET50 Index at a specific price on or before a certain date. An option, just like a stock or bond, is a security. It is also a binding contract with strictly defined terms and properties. The advantage of options is that you aren't limited to making a profit only when the market goes up. Because of the versatility of options, you can also make money when the market goes down or even sideways.
SET50 Index Options Contract Specification
Heading |
Contract Specification |
||
|---|---|---|---|
| Underlying Asset | SET50 Index which is compiled, computed and disseminated by the Stock Exchange of Thailand | ||
| Ticker Symbol | S50C: Call Options
S50P: Put Options |
||
| Contract Multiplier | THB 200 per index point | ||
| Contract Months | 3 nearest consecutive months plus 1 quarterly month | ||
| Minimum Price fluctuations | Price Limit | ||
| Price Limit | ± 30% of the previous day's SET50 Index | ||
| Exercise Style | European | ||
| Strike Price Interval | 25 points (at least 2 in-the-money strikes, 2 out-of-the-money strikes and 1 at-the-money strike). | ||
| Trading Hours |
|
||
| Speculative Position Limit | Net 20,000 delta equivalent SET50 Index Futures contracts on one side of the market in any contract months of SET50 Index Futures and SET50 Index Options combined. | ||
| Last Trading Day | The business day immediately preceding the last business day of the contract month. Time at which trading ceases on Last Trading Day is 16:30 hrs. | ||
| Final Settlement Price | The final settlement price shall be the numerical value of the SET50 Index, rounded to the nearest two decimal points as determined by the exchange, and shall be the average value of the SET50 Index taken during last 15 minutes and the closing index value, after deleting the three highest and three lowest values. | ||
| Settlement Method | Settlement Method |
Commission Rates for SET50 Index Options
No. of contract |
Commission rate (Baht/Contract) |
|
|---|---|---|
Via Markething Officer |
Via Internet |
|
| From 1st- 25th contract | 85.00 | 77.00 |
| From 26th - 100th contract | 65.00 | 59.00 |
| From 101st - 500th contract | 45.00 | 41.00 |
| From 501st contract onward | 35.00 | 32.00 |
Pre-Trade Knowledge
Advantage of FUTURES Contract
- Buyers and Sellers have authority in setting price.
- No need of physical delivery but use cash settlement method instead.
- Use less investment money but make more profit.
- Able to make profit in both uptrend and downtrend.
- Able to trade by the investor self via internet trading.
- There will be Marketing Officers (Brokers) to help in providing information for investment and following the market situation for the investors.
Margin Deposit in Futures Contract
Investors are required to deposit Margin with their respective broker before trading futures contract and there are following 3 types of margin.
- 1
Initial Margin (IM)
is the minimum equity required to initiate a futures position and equal to only 10% of underlying asset’s value.
- 2
Maintenance Margin (MM)
is a set minimum margin per outstanding futures contract that a customer must maintain in their margin account and equal to 70% of contract value.
- 3
Force Close (FC)
is the case when the margin level decrease to Force Close Margin Rate or 30% of contract value, the brokers have rights to close the account to cut loss instantly unless the investors can deposit additional funds to meet Initial Margin requirement within 1 hour.
Mark-to-Market
Date |
Transaction |
Closed Price |
Profit/Loss |
Transferred In/ Transferred Out |
Margin Amount |
|---|---|---|---|---|---|
| 03/02/2009 | Buy Gold Futures at 15,000 baht | 70,000 baht | |||
| Profit/loss adjustment | 15,080 baht | 4,000 baht (80 X 50) |
74,000 baht | ||
| 04/02/2009 | Profit/loss adjustment | 14,800 baht | -14,000 baht (280 X 50) |
60,000 baht | |
| 05/02/2009 | Profit/loss adjustment | 14,500 baht | -15,000 baht (300 X 50) |
45,000 baht | |
| 06/02/2009 | Deposit additional margin | 25,000 baht | 70,000 baht | ||
| Sell Gold Futures at 15,050 baht | 27,500 baht (550 X 50) |
97,500 baht |
3 Feb
Mr. A buys gold futures at 15,000 baht for 1 contract. After the price is at 15,080 baht, the market will Mark-to-Market to calculate profit/loss by comparing between closed price and buy price 15,080 -15,000 = profit 80 baht X 50 (1 gold futures contract is equal to 50 baht). Therefore, Mr. A will get profit 4,000 baht and whole margin amount is equal to 74,000 baht.
4 Feb
The price is lower to close at 14,800 baht. The calculated profit/loss is equal to 14,800 – 15,080 = (280*50) or loss 14,000 baht and the margin amount is equal to 60,000 baht.
5 Feb
The price is lower to close at 14,500 baht. The calculated profit/loss is equal to 14,500 – 14,800 = (300*50) or loss 15,000 baht and the margin amount is equal to 45,000 baht. Therefore, Mr. A is required to deposit additional margin 25,000 baht within the next day.
6 Feb
The price is lower to close at 14,500 baht. The calculated profit/loss is equal to 14,500 – 14,800 = (300*50) or loss 15,000 baht and the margin amount is equal to 45,000 baht. Therefore, Mr. A is required to deposit additional margin 25,000 baht within the next day.
Trading Steps
- 1
Register and open account with MTS Gold Futures with following required documents.
• Copy of ID card
• Copy of House Registration
• Statement or Book Bank Transactions in last 3 months.
• Copy of Book Bank (Only Kasikornthai Bank, Bangkok Bank, Krungthai Bank, and Siam Commercial Bank) - 2
Statement or Book Bank Transactions in last 3 months.
- 3
Send trading order to broker via telephone or trading by the investor self via internet trading.
- 4
Mark-to-Market
For your information regarding to profit or loss in your investment, TFEX will update your trade status in daily basis by adding fund to your margin account if you have profit on the contrary if you have loss, TFEX will deduct the amount of fund in your account.
- 5
Please be noted that you should recheck your account status to control risk and update your portfolio along with the market conditions.
