Energy

Oil Futures

Brent Crude Oil Futures is traded in TFEX to open chance for the investor to male profit from Brent crude oil’s price movement with convenience, speed and easiness. In Oil Futures trading, buyer and seller will make agreement for oil price in the future by sending buy order (Bid) and sell order (Offer) via broker like stock trading. However, Oil Futures will not have physical delivery but use Cash Settlement method. Buyer can make profit when the oil price is higher, but will get loss if the oil price is lower. In contrast, seller can make profit when the oil price is lower, but will get loss if the oil price is higher.

Brent Crude Oil Futures Contract Specification

Heading
Contract Specification
Underlying Asset Brent Crude Oil
Ticker Symbol BR
Contract Size 100 Barrels
Contract Months 3 consecutive months
Price Quotation Price will be quoted in Baht per 1 barrel
Minimum Price Fluctuations THB 1 (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 ±20 % of the latest settlement price.
Trading Hours
Pre-open:
Morning session:
Pre-open:
Afternoon session:
Pre-open:
Night session:
09:15 - 09:45 hrs.
09:45 - 12:30 hrs.
14:00 - 14:30 hrs.
14:30 - 16:55 hrs.
19.15 - 19.30 hrs.
19.30 - 22.30 hrs.
Speculative Position Limit Exchange may announce the position limit as it deems appropriate.
Last Trading Day
(1) The business day preceding the 15th calendar day from the last calendar day of the maturing contract month.
(2) If such 15th day is non-trading day, the last trading day shall be the business day
immediately preceding the first business day prior to the 15th day. Time at which trading ceases on Last Trading Day is 22:30 hrs.
Final Settlement Price The Final Settlement Price shall be calculated on the basis of the ICE Brent Index published on www.theice.com and the foreign exchange rate for Baht to US dollar announced by TFEX.
Settlement Method Cash Settlement

Commission Rates for Brent Crude Oil Futures

No. of contract
(per day per account)

Commission rate (Baht/Contract)
Via Markething Officer
Via Internet
From 1st- 25th contract 110.00 101.00
From 26th - 100th contract 90.00 83.00
From 101st contract onward 70.00 65.00
** 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