Malaysian Derivatives
Group Assignment Malaysian Derivatives.
Question 1 (a) : By giving examples, explain the heading of each column. Trading of commodity futures is based on the tangible physical commodity. Commodity futures have storage value and therefore it can be delivered physically. All outstanding contracts in commodity futures are required to be settled by physical delivery at maturity. Crude Palm Oil were the first derivative instrument to be traded in Malaysian derivative market. It was launched on October 1980 at the Kuala Lumpur Stock Exchange, (KLCE). Besides CPO Futures, rubber, tin, cocoa, palm kernel and olein futures also traded by the BMDB (Bursa Malaysia Derivatives Berhad). However, only CPO futures commodities are successfully traded at BMDB. Due to the very active and liquid of CPO futures, it provides a global benchmark for the price of physical palm oil as well as a market price for risk management. All trading of crude palm oil futures use to take place on the trading floor of the BMDB by method the open-counter as opposed to the BMSB. Since 2002, however BMDB is an automated-trading exchange as in the case of BMSB. Prices of CPO futures are disseminated real-time world wide through a number of price reporting agencies notably Reuters, Telerate and Bloomberg.
The price quotations and market report for CPO Futures is printed in the daily newspaper. An example is picked from newspaper, The Star on 13th June 2013 :
Table 1: Price Quotations and Market Report for CPO Futures.
BURSA MALAYSIA DERIVATIVE BERHAD (BMDB)
(June 13, 2013) The Crude Palm Oil Futures Closing : June 2013 | Month | Open | High | Low | Settle | Vol | O.P. | Jun 2013 | | | | 2389 | | 1065 | Jul 2013 | 2455 | 2455 | 2405 | 2418 | 2049 | 9066 | Aug 2013 | 2443 | 2460 | 2411 | 2424 | 131181 | 55366 | Sep 2013 | 2444 | 2456 | 2412 | 2424 | 5002 | 33901 | Oct 2013 | 2441 | 2452 | 2416 | 2422 | 584 | 14840 | Nov 2013 | 2441 | 2453 | 2408 | 2423 | 916 | 29119 |
Question 1 (a) : By giving examples, explain the heading of each column. Trading of commodity futures is based on the tangible physical commodity. Commodity futures have storage value and therefore it can be delivered physically. All outstanding contracts in commodity futures are required to be settled by physical delivery at maturity. Crude Palm Oil were the first derivative instrument to be traded in Malaysian derivative market. It was launched on October 1980 at the Kuala Lumpur Stock Exchange, (KLCE). Besides CPO Futures, rubber, tin, cocoa, palm kernel and olein futures also traded by the BMDB (Bursa Malaysia Derivatives Berhad). However, only CPO futures commodities are successfully traded at BMDB. Due to the very active and liquid of CPO futures, it provides a global benchmark for the price of physical palm oil as well as a market price for risk management. All trading of crude palm oil futures use to take place on the trading floor of the BMDB by method the open-counter as opposed to the BMSB. Since 2002, however BMDB is an automated-trading exchange as in the case of BMSB. Prices of CPO futures are disseminated real-time world wide through a number of price reporting agencies notably Reuters, Telerate and Bloomberg.
The price quotations and market report for CPO Futures is printed in the daily newspaper. An example is picked from newspaper, The Star on 13th June 2013 :
Table 1: Price Quotations and Market Report for CPO Futures.
BURSA MALAYSIA DERIVATIVE BERHAD (BMDB)
(June 13, 2013) The Crude Palm Oil Futures Closing : June 2013 | Month | Open | High | Low | Settle | Vol | O.P. | Jun 2013 | | | | 2389 | | 1065 | Jul 2013 | 2455 | 2455 | 2405 | 2418 | 2049 | 9066 | Aug 2013 | 2443 | 2460 | 2411 | 2424 | 131181 | 55366 | Sep 2013 | 2444 | 2456 | 2412 | 2424 | 5002 | 33901 | Oct 2013 | 2441 | 2452 | 2416 | 2422 | 584 | 14840 | Nov 2013 | 2441 | 2453 | 2408 | 2423 | 916 | 29119 |