China to Embrace Energy Futures in Shanghai Free-Trade Zone

The Shanghai Administration of Industry and Commerce, a regional government organisation that is responsible for market surveillance and law enforcement concerning industry and commerce in Shanghai, has sanctioned the latest trading venue to establish itself in China.

Under the new terms, China will issue futures contracts on a range of energy contracts including crude oil and natural gas.

The Shanghai International Energy Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term will be situated in the Shanghai Pilot Free- Trade Zone. China holds significance in the global economy as a producer and user of several commodities, the launch of a dedicated energy venue will serve the needs of participants involved in the energy sector. According to official data China became the world's largest importer of energy (October 2013).

The new exchange will be based in the Shanghai free-trade zone, the first free-trade zone in the mainland. The Shanghai International Energy Exchange is the largest exchange in the zone.

The Shanghai Administration of Industry and Commerce said in a notification that the new exchange was registered with a capital of 5 billion yuan (US$821 million).

Commodities have been gaining traction as traders appreciate Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term in oil, gold and silver. The unrest in the Middle East has left uncertainty in the region, one of the largest oil producing regions, and hence the uptake in trading activity.

The Shanghai International Energy Exchange will become the fifth futures exchange in China.