Thursday, January 24, 2008

Bursa Malaysia

In Malaysia, the trading of futures contracts are conducted in Bursa Malaysia, just like CBOT ( Chicago Board Of Trade ) in US. With the advancement of internet services, one can view the fluctuation of the market price ( real-time price ) throgh his own computer at home without having to presence himslf in Bursa Malaysia or any brokerage firm. The products which are traded in Bursa Malaysia include;

* FCPO - Crude Palm Oil Futures
* FPKO - Crude Palm Kernel Futures
* FKLI - Kuala Lumpur Index Futures
* FKB3 Futures
* USD CPO Futures
* FMG3 - Malaysian Government Secutities Futures

From the above, the CPO and FKLI are the most popular futures among the investors and are traded heavily on daily basis.
CPO's contract size is 25 metric tons with a minimum price fluctuation of RM1 per metric ton. The trading hours are from 10.30 a.m. to 12.30 a.m and 3.00 p.m. to 6.00 p.m. in the evening.The contracts expire on 15th day delivary month.

Why CPO?

Malaysia is the largest supplier of palm oil in the world and eventhough Indonesia is catching up to be the next world's producer of palm oil, the palm oil produced by Malaysia is said to be off the highest quality.The nearest competitor to palm oil is the soybean oil which are produced largely by the US. Any movement of the price of the soybean oil would have an impact on the price of the palm oil and vise versa. They are said to be inter-related.

The advantage of futures trading especially the CPO is the potentiality of making huge profits ( losses as well) in a short time. At the present situation, the market price of CPO is relatively high that is around RM3000 and the fluctuation of the price is between 30 points to 100 points per day ( between RM30 to RM100 .e.g. If you make a profit of 50 points, your profits would be RM1200 per lot after deducting the brokerage cost ). With proper strategies , anybody who would like to involve himself in this form of investment would take advantage of this current market situation immediately. In fact this is the right time to invest as you can do day-trade which means you can buy and sell the futures ( or vise versa ) with out having to bring forward to the next day. Unlike stock market where short selling ( sell now and buy later to make profits ) is not allowed, the futures market practise two ways of trading ; Buy now and Sell later and also; Sell now and Buy later.

Further readings ;

No comments: