Top Six Reasons Why You Should Trade Futures Today
1) Able to Trade Either Bullish or Bearish
You can Easily and legally to do a Short in futures market. It now possible to Make profits even when markets are falling and bearish.
Do take advantage of both Bull and Bear money making opportunities
2) Gave Flexibilities to trade Alternative Asset Classes
Profit from strong price trends on commodities like Crude Palm Oil(CPO). Therefore your investment opportunity option are not limited.
3) Profit from Power of Leverage
Leverage is a measure of the market value of your futures position relative to the amount of your trading capital.
Leverage is normally range from 8x to 20x.
With only a fraction of capital you able to controls a lots of futures value.
Therefore, a small movement in the market can translate into big movements in your investment portfolio.
Please use risk management as well to control risk. This is main key to succeed in futures trading
4) Provide portfolio Hedging
You do not sell you stocks, just hedge them accordingly. As a result, you can continue to collect your dividends.
By hedging, it help to protect your stock portfolio from a falling market
5) Volatility Equal Opportunity
A high volatility in the financial and commodity markets provide a huge trading
opportunities especially for short term or day trader.
Huge trading opportunities in high volatility is always available in futures markets
6) No stock Picking Skill Required
Finding good stocks to trade can be very challenging as we have more than 800 stocks in Bursa Malaysia.
In Stock Index futures, it allows investor to trade the overall trend of the stock market.
Bursa: Volume of derivatives will double in 3 years
By JAGDEV SINGH SIDHU
KUALA LUMPUR: Bursa Malaysia Bhd expects the volume of derivatives traded to double in three years after the derivatives and futures products migrate onto the Chicago Mercantile Exchange (CME) Globex system this month.
Bursa Malaysia Derivatives CEO Chong Kim Seng says the exchange has big hopes for its main two products – the CPO futures and KLCI futures indices – and is working on developing newer products after the migration of trading which will see those products jointly done in Malaysia and in 85 other countries.
“It helps us to go into global distribution. It means our product will be put alongside the other contracts such as soybean oil and wheat and all the products on Globex,” he told StarBiz.
CME has a 25% stake in Bursa Malaysia Derivatives and has licensed the benchmark crude palm oil futures (FCPO) to CME for the exchange to develop a cash-settled dollar derivative of FCPO.
FCPO is a physical delivery futures.
“This will help us get people interested in palm oil who are seated at the other part of the world,” he said.
Chong said the contract would internationalise the visibility of Malaysia and the Globex trading system would open new avenues for trade because of its electronic platform and online trading.
“Potentially, we can bring in a lot more people who are interested,” he said.
“Right now the system is broker oriented, where orders are given to the broker and they execute the order. The distribution is not wide and now (Globex) will bring the world to us by having electronic distribution.”
One such experience where a foreign bourse saw a boom in trading activity was the Sao Paulo Stock Exchange (Bovespa) which formalised ties with the CME.
Boverspa merged its Brazilian Mercantile & futures Exchange with the CME and after its contracts migrated onto the Globex system, there was an eight-fold increase in order in just nine months to December 2009.
“We always think on how to double our products. We are looking at doubling the results in three years,” he said.
“Using the Brazilian Bovespa experience, they linked up with CME and over nine months, they have made a quantum leap. That is known as the North-South trade and we hope to create the East-West trade.”
Chong said the contracts both on Bursa Malaysia and CME would trade at the same time.
Financially, there will be a benefit for Bursa Malaysia as it will gain a licensing fee from the CME and the new crude palm oil derivative contract CME will launch – CUPO – should also enlarge the customer base for Bursa Malaysia.
Even though the derivative contract would be launched, he said, the fundamental price discovery would be in Malaysia on the benchmark FCPO contract.
Chong thinks having crude palm oil derivatives trade alongside the soybean oil futures contract will be a plus. “There is correlation between both edible oils and relative value trading is expected to increase a lot,” he said.
He said the crude palm oil futures would remain the most important contract for Bursa Malaysia as it’s the most liquid. But Chong feels there is also great potential for the FTSE Bursa Malaysia KLCI Futures (FKLI).
Palm oil did 4 million contracts last year and 2 million on the KLCI futures (FKLI).
“We have a good chance to bring eyeballs into our stock index,” said Chong.
fr:biz.thestar.com.my/news/story.asp?file=/2010/9/13/business/7022259&sec=business
Rise in October CPO output seen
By FINTAN NG
But analysts expect no big jump due to weather
PETALING JAYA: Malaysia’s October crude palm oil (CPO) production will see an increase despite the bad weather that has inundated the northern peninsula states in recent weeks.
However, according to analysts, the increase in production would not be as strong as what was seen a year ago due to weather conditions.
“I still think production for October will increase but it’ll not be a big jump as workers are just beginning to come back to the plantations following the Aidil Fitri holidays,” Singapore-based DBS Vickers Research analyst Ben Santoso told StarBiz.
ECM Libra Investment Bank Bhd research head Bernard Ching said in a report dated Nov 1 that production outlook for the rest of the year was not likely to overtake that of 2009 significantly given unfavourable weather this year although it was likely to come in strong for October.
The Malaysian Palm Oil Board is expected to release October’s production, inventory and export data tomorrow.
In September, production fell 2.7% to 1.56 million tonnes compared with August while stockpiles were 0.2% higher. Inventories of edible oil rose to 1.70 million tonnes and exports rose 21.2% to 1.46 million tonnes.
Santoso said production would still lag behind inventories while Ching said stock levels might not reach safe levels of more than 2 milion tonnes to take the industry through the year-end festive season and the oncoming production down cycle.
“I estimate inventories to be around 2 million tonnes while, for the near term, CPO prices should stay around RM3,000 a tonne given sentiments so there will be no big change,” Santoso said.
For the first quarter of next year, he expects prices to be RM3,000 to RM3,500 per tonne which should be reflective of Malaysian yields in January and February.
Santoso said prices would be supported by lower output for 2010 given the drought conditions earlier in the year and the lower incoming soybean crop from Latin America.
He said given the lack of near-term catalysts following the Deepavali festivities, demand for palm oil would pick up again in December when shipments for the Chinese New Year festivities began.
Ching said demand for soybean from China, which has to-date taken up the equivalent of 94% of last year’s imports, would be a key driver for CPO besides local fundamental drivers.
“Already, soybean prices surged 17.1% during the month (September) on concerns of tightening supplies,” he said, adding that soybean prices had room to run and so would CPO prices.
Meanwhile, Bloomberg reported that global prices of soybean and palm oil were likely to extend their advance on demand from China and as investors bought into commodities to protect their wealth.
Godrej International Ltd director Dorab Mistry said in a prepared speech at a conference over the weekend that palm oil might see gains of more than 3% in the next few weeks to RM3,300 per tonne.
CPO for January delivery rose 4.7% to RM3,341, which was the highest ever in intraday trade since July 18, 2008 in mid-morning trade yesterday before settling RM82 higher at RM3,273 per tonne.
fr:biz.thestar.com.my/news/story.asp?file=/2010/11/9/business/7385374&sec=business