Precious Metal



MTS Gold Future

Gold Future

Gold Futures is a standardized contract between two parties to buy or sell gold (96.5% purity) at agreed futures price. The investors can take an advantage in making profit according to the gold price expectation in both uptrend and downtrend by trading in Thailand Futures Exchange market (TFEX) and Thailand Clearing House Co.,Ltd. (TCH) will guarantee clearing and settlement for a concerned party . The Securities and Exchange Commission (SEC) will also regulate in TFEX trading. Therefore, the investors can be confident that every trading transaction will be transparent and reliable.


Gold Futures Characteristics
Underlying Asset Buyers and Sellers have authority in setting price.
Trading Price 1 Contract is equal to 50 and 10 Baht per Thai Gold Baht.
Delivery Date February April June August October and December. The investors can trade in contracts that have delivery date in nearest 6 months only.
Delivery Method Cash settlement method with no need of physical delivery.

Comparison between Gold Futures and Physical Gold


Gold
Gold Futures
Investment Money Full 100% Investment money Invest with only margin valued 10% of contract value.
Delivery Method Physical Delivery at gold shops Cash Settlement Method
Making Profit Strategy Make profit in uptrend only Make profit in both uptrend and downtrend.
Investment price Change according to the Gold Trader Association Price (change 1-2 times per day). Change all time according to trading price in the market.
Investment Fee No any Fee but has different cost at 100 baht. 0.1% of contract value fee but has different cost at only 10 baht.
Investment Period Medium and Long Term Short Term or Day Trading

10 Baht Gold Futures Contract Specification

Heading
10 Baht Gold Futures
Underlying Asset Gold Bullion with a purity of 96.5%
Ticker Symbol GF10
Contract Size 10 Thai Gold Baht (152.44 grams)
(1 Thai Gold Baht = 15.244 grams)
Contract Months 3 nearest even month : February, April, June, August, October, December
Price Quotation Baht per one baht-weight of gold
Minimum Price Fluctuations THB 10 (or THB 100 per contract)
Price Limit Initial price limit is ±10% 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 ± 20% of the latest settlement price.
Trading Hours
Pre-open:
Morning session:
Pre-open:
Afternoon session:
Pre-open:
Night session:
09:15 น. - 09:45 hrs. 
09:45 น. - 12:30 hrs.  
13:45 น. - 14:15 hrs. 
14:15 น. - 16:55 hrs. 
18:45 น. - 19:00 hrs. 
19:00 น. - 23:55 hrs.
Speculative Position Limit of the latest settlement price.
Last Trading Day The business day immediately preceding the last business day of the contract month. The trading of expiring contract will be ceased at 16:30 hrs on Last Trading Day.
Final Settlement Price The Final Settlement Price shall be calculated on
- the basis of the London Gold A.M. Fixing price announced by London Gold Market Fixing Limited on the last trading day and the foreign exchange rate for Baht to US dollar announced by TFEX on the last trading day, after conversion for weight and fineness.

The formula for its calculation is as follows:
= London Gold AM Fixing x (15.244/31.1035) x (0.965/0.995) x (THB/USD)

Note:
  • 1 troy ounce = 31.1035 grams
  • 1 Thai Gold Baht = 15.244 grams
  • London Gold AM Fixing is based on 0.995 gold
  • The underlying of gold futures contract is 0.965 gold
  • Price per one baht-weight of gold (2 decimal points)
Settlement Method Cash Settlement

Commission Rates for 10 Baht Gold Futures

No. of contract
(per day per account)

Commission rate (Baht/Contract)
Via Markething Officer
Via Internet
From 1st- 25th contract 97.00 88.00
From 26th - 100th contract 77.00 70.00
From 101st - 250th contract 57.00 52.00
From 251st contract onward 47.00 43.00
** This price does not include 7% VAT.


Pre-Trade Knowledge

Advantage of FUTURES Contract

  1. Buyers and Sellers have authority in setting price.
  2. No need of physical delivery but use cash settlement method instead.
  3. Use less investment money but make more profit.
  4. Able to make profit in both uptrend and downtrend.
  5. Able to trade by the investor self via internet trading.
  6. 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.
MTS Gold Futures co., Ltd.
121/19 The Old Siam Plaza 1st Floor Pahurat Road, Wangburapapirom Sub-District, Pranakorn District, Bangkok 10200 Thailand
Copyright © 2014 MTS Gold Future. All right reserved