Today I will post the contract specification for the second most active futures contracts traded here in Malaysia which is a futures contract based on our local Indices.
While there are some of the more well known indexes and its own futures contract such as the Hang Seng Index, Nikkei 225, the S&P500, Dow Jones, Nasdaq, Russel, etc, we have our very own index futures known as the FKLI futures.
Now with so many indexes to choose from, you may ask which is better to trade? Right?
Well, this choice really depends on the individual themselves..
For example, as a Malaysian, if you were interested to trade the S&P500 or Dow Jones futures, you would need to stay up throughout the whole night as the market in the US only opens at our local time 9.30pm now. What this means is that, you would be awake almost 24 hours in the day. When your brain is deprived of sleep, it will tend to make mistake and trading in these global market with the countless professional traders with years of experience just sitting on the opposite side of the trade taking your money as you become bait chump can mean that you have a great chance of being on the losing side of the trade.
And you say.. ok lets trade the Hang Seng Index.. well.. why not? Only thing is, how well do you know about the Hong Kong market to trade it well enough to make money consistently?
As a Malaysian with our natural waking hours, there are ample opportunity to make money with just the local indexes.. The cost of trading is at historic low and the execution is as good as any other market with a healthy volume and open interest. Granted, the volume and range sometimes may not be as great as those of other markets in the world, but what if you were given a choice between trading something which you know better and gives you more confidence and one which you only have a some idea?
It only makes sense that trading the local market which we know and understand better will give us more chance to make money. And rest assured, there are plenty of people who many decent money just by trading the FKLI.. and maybe after you have made your bucks and would like to try your hands on the overseas market, you can risk a portion of your portfolio for that purpose..
Alright without further delay, below are the contract specification for the KLCI Futures Contract - FKLI taken from Bursa Malaysia's website.
Regards,
Tech Trader
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| Contract Code | FKLI |
|---|---|
| Underlying Instrument | FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) |
| Contract Size | FBM KLCI multiplied by RM50 |
| Minimum Price Fluctuation | 0.5 index point valued at RM25 |
| Daily Price Limits | 20% per trading session for the respective contract months except the spot month contract. There shall be no price limits for the spot month contract. There will be no price limit for the second month contract for the final five Business Days before expiration. |
| Contract Months | Spot month, the next month and the next two calendar quarterly months. The calendar quarterly months are March, June, September and December. |
| Trading Hours | First trading session: Malaysian 8:45 a.m. to 12:45 p.m. Second trading session: Malaysian 2:30 p.m. to 5:15 p.m. |
| Final Trading Day | The last Business Day of the contract month. |
| Final Settlement | Cash Settlement based on the Final Settlement Value. |
| Final Settlement Value | The Final Settlement Value shall be the average value, rounded to the nearest 0.5 of an index point (values of 0.25 or 0.75 and above being rounded upwards), taken at every 15 seconds or at such intervals as may be determined by the Exchange from time to time from 3.45:30 p.m. to 4.45:15 p.m. plus one value after 5.00pm of the FBM KLCI on the Final Trading Day excepting the 3 highest and 3 lowest values. |
| Speculative Position Limit | Maximum number of net long or net short positions to be held:
10,000 contracts for all months combined |
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