Thai
EngInterest Rate
3M BIBOR Futures
Interest Rate Futures is a futures contract with an interest-bearing instrument as the underlying asset. Interest rate futures are used to hedge against the risk of interest rates moving in an adverse direction. Moreover, the investor can make profit from both upward and downward interest rate trend and adjust the proportion of investment instantly. Therefore, the investor can manage the investment portfolio effectively.
3M BIBOR Futures Contract Specification
Heading |
Contract Specification |
||
|---|---|---|---|
| Underlying Asset | 3M BIBOR | ||
| Ticker Symbol | BB3 | ||
| Contract Size | THB 10,000,000 | ||
| Contract Months | 2 nearest quarter months on March June September December cycle | ||
| Price Quotation | In terms of index 100.000 - Yield (on annual basis with 3 decimal points) | ||
| Minimum Price Fluctuations | 0.005 (or THB125 per contract) | ||
| Price Limit | Initial price limit is ± 1.25% from the latest settlement price. Should traded price reach the limit, trading will be halted for a certain period announced by TFEX. After trading resumes, the price limit will be expanded to ± 2.50% of the latest settlement price. | ||
| Trading Hours |
|
||
| Speculative Position Limit | Net 2,000 contracts of 3M BIBOR Futures on one side of the market in any contract month or all contract months combined. | ||
| Last Trading Day | The third Wednesday of the contract month and the trading of expiring contract will be ceased after 11:00 hrs. on the last trading day | ||
| Final Settlement Price | Calculated from 3M BIBOR fixed at 11:00 hrs. (BKK time) as announced by Bank of Thailand on the last trading day (4 decimal points) | ||
| Settlement Method | Cash Settlement |
Commission Rates for 3M BIBOR Futures
Time Period |
Commission rate (Baht/Contract)/per day /per account |
|
|---|---|---|
Via Markething Officer |
Via Internet |
|
| 1/12/2012 onward | 120.00 | 110.00 |
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.
