Thai Equity Derivatives Hit New Record High

Thailand, one of the fastest growing markets in South East Asia, is quickly positioning itself as a 'go to market' for global investors looking at alternative markets. The country boasts equity derivatives and gold futures apart from stocks and bonds. The bourse has had record trade volumes as investors appreciate the new derivatives contracts launched by the Exchange . The exchange boasts daily trade volume of around $800 million (USD).

The Thailand Futures Exchange PCL (TFEX), under The Stock Exchange of Thailand group, revealed that trading volume of stock futures hit an all-time high after expanding its stock futures position limit to be proportional to the listed shares of the underlying stocks on January 14.

The SET Index is trading at 1,415.05.

TFEX Managing Director Kesara Manchusree said: “Since we implemented the change of position limit for stock futures on January 14, its trading volume has reached a record high of 80,183 contracts, a nine-fold rise from average daily trading volume of 8,849 contracts in 2012. This result in TFEX’s trading volume of 113,859 contracts.

The most actively-traded stock futures (in descending order) were BTS futures 58,182 contracts (72.56 percent), QH futures 6,024 contracts (7.51 percent), the rest were from TMB futures 4,058 contracts (5.06 percent), ITD futures 4,014 contracts (5.01 percent), and KTB futures 3,625 contracts (4.52 percent).

Currently, TFEX has 30 underlying stocks which are all constituents in SET50 Index. The contract size is 1,000 shares and TFEX offers four contract months ending every month-end of quarter. The position limit change, starting on January 14, enables investors to hold contracts based on the listed shares of underlying stocks in a range of 20,000-435,500 contracts, from a single level of 20,000 contracts. This helps investors to manage their portfolios more effectively.

TFEX also allows block trading with a minimum of 100 contracts. Many brokers have offered to be block trading counterparty such as Phatra Securities pcl, KGI Securities (Thailand) pcl, and KT Zmico Securities Company Limited.”