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Derivatives are financial instruments or financial contracts that have unique characteristics in that their value is derived from the value of and underlying asset. The maturity date will have an impact on the value of the derivatives as they approach their date of maturity.
Characteristics of Derivatives
- Derivatives have no inherent value themselves as their value is mainly driven by the underlying asset that it is related to.
- Each derivatives contract specifies a maturity date, while stocks differ in that they will continue to be traded as long as they are listed on the Stock Exchange. A stock holder is also different from a derivatives contract holder in terms of ownership. A stock holder becomes a part owner of the company which issues the stock and possesses the right to attend company meetings, obtain dividends, etc.
- A derivatives contract is an agreement between two contracted parties to buy or sell an asset at a fixed price on or before a date of expiration. An equity investment provides stock holders ownership of a stock with no term or condition requiring the holder to sell. A derivatives contract holder, however, needs to close the position on a specified date, or the maturity date.
- Derivatives contracts allow leverage, meaning that investors may spend less of their own funds for an investment. This provides a high risk, as although high profits are possible, so are losses.
Types of instruments that may be traded in TFEX
There are 2 types of derivatives traded in the Thailand Futures Exchange (TFEX), futures and options
- Futures are contracts in which two parties are obligated to buy / sell an underlying asset on the date of maturity according to a settled agreement
- Options are similar to futures, but instead one party has a choice whether to buy or sell on the maturity date
Mark to market calculation for Futures and Options: in the daily settlement process, the mark to market price along with the client’s profit or loss will be used to adjust the client’s margin at least at the end of every trading day. Before any execution, the company will recheck the level of the client’s excess equity. Also, while the execution is queuing and excess equity has decreased, the company will do the following;
- If the order cannot be matched at the end of the day, the order must be canceled
- If the order is matched and the client’s mark to market margin has fallen below the maintenance margin requirement, a call margin procedure must be taken.
Upon the above cases, suppose the client has been using “Good Till Date” or ”Cancel,” and he wants the “Good Till Date” or ”Cancel” order to proceed in the following business day, the company will recheck whether the client’s margin is adequate to allow for such action.
Notice :
- How to calculate margin requirement Click here
- Margin Requirement Click here
- Fees Click here
- Definition for margin calculation Click here
- SET50 Index Futures
- SET50 Index Options
- Single Stock Futures
- Gold Futures
- Silver Futures
- Interest Rate Futures
- Brent Crude Oil Futures
Practices of trading futures halt arising from the changes more or less to the level of the highest traded price changes each day (Daily Price Limit) in the following:
- The trading price that is used to determine trading halts will consider trading price of the Nearest Contract Month Series. However, during the previous 10 business days from the Last Trading Day of the Nearest Month Contract, TFEX will consider trading price of the 2nd Contract Month Series. It will be started from the previous Night Session of the business days in the case of futures trading during the night.
- The period of trading halts: TFEX will stop trading duration 30 minutes including 10 minutes for Pre-open period before trading hours.
- Futures contracts for the same underlying assets : TFEX will determines trading halts for all of the contracts that underlying assets are all the same, in case of price changes, trading volume reached Daily Price Limit as follows:
| Underlying Asset | Futures contracts for the same underlying assets |
Circuit Breaker Level |
| SET50 | SET50 Index Futures |
±30% of the previous day settlement price |
| Gold | 10 Baht Gold Futures |
±10% and 20% of the previous day settlement price respectively |
| Silver | Silver Futures | ±10% and 20% of the previous day settlement price respectively |
| Crude Oil | Brent Crude Oil Futures | ±10% และ 20% of the previous day settlement price respectively |
| BIBOR | 3M BIBOR Futures | ±1.25% and 2.50% of the previous day settlement price respectively |
| THBFIX | 6M THBFIX Futures | ±1.25% and 2.50% of the previous day settlement price respectively |
| Government Bond |
5Y Government Bond Futures |
±2.50% and 5% of the previous day settlement price respectively |
TFEX will keep order status valid until the end of each trading day. Order entry will be sorted by Price and the Time Priority.
The definition of order entry
- Limit Order is an order entry with specific bid/offer price
- Market Order: Fill and Kill (FAK) is an order entry with an immediate execution at any bid/offer price. In case of order being executed partially, the rest will be canceled out automatically.
- Market Order: Fill or Kill (FOK) is an order entry with an immediate execution at any bid/offer price. In case of order not being executed with the whole amount as required by the investors, the order will be canceled out.
- Hidden Limit Order or Public Order is an order entry with specific price and greater than 10 contracts. Order will be divided into group with the minimum of 10 contracts at a time and will be sent to the system automatically.
- Combination Order is an order entry with difference contract month expiry but the same underlying asset. Mostly order will be executed in the between the nearest and the furthest month with the specific price difference.
Remark: Only Interest Rate Futures = nearest series – furthest series
- Stop Limit Order is order entry with specific price. The order will be effective when Last Price, Best Bid or Best Ask is in line with condition set by investor.
Condition on order entry
1.Either on bid and offer side need at least 1 contract but there should not be greater than the limitation set by TFEX as the following detail shown in the table below
SET50 Index Futures, |
SET50 Index Options and Single Stock Futures |
|
| Trade via marketing | No greater than 100 Contracts | No greater than 500 Contracts |
| Trade via internet | No greater than 100 Contracts | No greater than 500 Contracts |
2.Order will be divided into 10 contracts per each of the order entry which order entry is great that 10 contract for the total amount
3.The Combination Order entry either on bid or offer side will be under the limited as shown in the table.
Underlying Asset |
Price Limit |
| SET50 Index Futures | No grater than ± 10 points from the previous settlement price of each of Series which is part of the combination order |
| Single Stock Futures | No greater than Baht ± 10 from the previous settlement price of each of each of Series which is part of the combination order |
| Gold Futures and Brent Crude Oil Futures | No greater than Baht ± 200 from the previous settlement price of each of Series which is part of the combination order |
| Silver Futures | No grater than ±100 Baht from the previous settlement price of each of Series which is part of the combination order |
5YGovernment Bond Futures and 6M THBFIX Futures |
No greater than ±1.5 from the previous settlement price of each of Series which is part of the combination order |
4. Order types which are not allowed
Underlying Asset |
Pre-Open |
Morning / Afternoon Session |
SET50 Index Futures Silver Futures Brent Crude Oil Futures 5Y Government Bond Futures 3M BIBOR Futures 6M THBFIX Futures |
|
|
| SET50 Index Option |
|
|
Order entry with Good till Date and Good till Expiration condition for Single Stock Futures will be canceled out automatically at the end of the trading day before Corporate Action take place.
5.Bid or offer price entry should not be greater than the condition price limit by TFEX as shown in the table below
Underlying Asset |
Condition Limit by TFEX |
| SET50 Index Futures, Single Stock Futures, Gold Futures, Silver Futures and Brent Crude Oil Futures |
± 5% of last execution price |
| SET50 Index Options | ± 5% of the previous closing price of SET50 index |
| 5Y Government Bond Futures | ±1% of last execution price |
| 3M BIBOR Futures and 6M THBFIX Futures |
±0.5% of last execution price |
Remark : In case of sending order ±5% from the last execution price, the customers will be remained automatically by the program to assure for the continuing process of the following transaction
6.Others
- In case of order placement with Market Order menu during Morning Session and Afternoon Session, investor will be allowed to place the following order when the highest Bid or the lowest Offer is no greater than +/-5% of the last execution price
- In case of no transaction to be made in futures contract on the following day. The order entry need to be checked with the following price.
- The Previous Day Settlement Price
- TFEX announcement
- Block Trade Order Click here
To transfer an initial margin to your account, you are advised to transfer funds via one of the banks as listed below:
| Account Name:: "KT ZMICO Securities Company Limited For Client" | ||||
| Bank Name | Branch | A/C Type | A/C Number | SWIFT Code |
| Krung Thai Bank | Na Na Nue |
Current | 000-6-13245-6 | KRTHTHBK |
| Siam Commercial Bank | Thanon Witthayu |
Current | 049-3-12955-2 | SICOTHBK |
| Kasikorn Bank | Silom |
Saving | 789-2-10150-1 | KASITHBK |
| Bangkok Bank | Head Office |
Saving | 101-8-46587-0 | BKKBTHBK |
| TMB Bank | Silom Soi 7 |
Saving | 004-2-22088-9 | TMBKTHBK |
| Bank of Ayudhya | Central World |
Saving | 511-1-04563-7 | AYUDTHBK |
| Thanachart Bank | Ton Son |
Saving | 001-2-12115-1 | THBKTHBK |
| Sumitomo Mitsui Bank |
Bangkok |
Saving | 20-2019294-1 | SMBCTHBK |
After remittance, you are required to notify the company of your fund transfer by faxing a copy of the deposit slip (pay-in-slip) specifying your name, last name along with your derivatives trading account number and contact number to the Operation Service Department at (66) 0-2631-1704.
If you are not in Thailand, you are advised to download and print a Cash Deposit Form. Fill in the form and submit it to your bank for further processing.
Remark: Please note that bank charges are applied when remitting funds electronically. Those charges may be deducted by the receiving bank in Thailand.
Buying Limit Adjustment Period for Futures Trading
The company will adjust your buying limit after being informed of the deposit. The period for buying limit adjustments is as follows:
| Notification Time | Update Time |
| Before 12.00 p.m. (noon) | No later than 2:30 pm on the same day |
| From 12.00 p.m. to 4:30 p.m. | No later than 9:30 am of the next working day |
Note:
- The above will not apply for deposits to Kasikorn Bank via ATM machine. In such case, buying limits will be updated in accordance with the notification time from Kasikorn Bank.
- Please note that the above update times may not apply for overseas remittances. Update times will depend on the notification time from your overseas bank.
If your "Buying Limit" has not been updated, please contact Ms.Pattraraporn Jettanachareonchai at
(66) 0-2695-5501 or 0-2695-5460 or send an email to futuresonline@ktzmico.com
Collateral Withdrawal
Click here to print out a cash withdrawal form and fax it to the Operation Service Department at 0-2631-1704.
Remark: The company has the authority to consider the approval of a cash withdrawal on a case-by-case basis based on existing terms and conditions. These may be subject to change without prior notice.
Interest Rate (Cash Margin Deposit)
| Account Type | Interest Rate (per annum) |
| Individual Account | 1.50 % |
| Corporate Account | 0.50 % |
Remark: :
- The company reserves the right to change the above interest rates with respect to possible future interest rate announcements from Thai commercial banks.
- The company will pay interest on a semi-annual basis (January 1 & July 1) by crediting the interest amount directly to your TFEX trading account. In case the payment date is a public holiday, interest will be credited to your account on the next working day.
- Gold Spot Price click here
- Gold Spot Price by Gold Traders Association of Thailand click here
- Gold Price Converter click here
- Silver Spot Price click here
- Thailand Bond Trading Information click here
- The Individual Bond information click here
- Bond Theoretical price Calculation Program click here
- Calculation Program
- Futures click here
- Options click here
- Gold click here
- Silver click here
- Bond click here
- Crude Oil Futures click here
Derivatives Department
KT ZMICO Securities Company Limited
8th Floor, Liberty Square Building, 287 Silom Road,
Bangrak, Bangkok 10500 Thailand
Telephone: (66) 0-2695-5558
Fax: (66) 0-2695-5599
E-mail: derivativescenter@ktzmico.com
