BMD Crude Palm Oil Specification
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Transcript of BMD Crude Palm Oil Specification
Brochure-EnglishOpen Size: 210mm(H) x 297mm(W) / Close Size: 210mm(H) x 148.5mm(W)
TABLE OF CONTENTSChapter 1 – FCPO What is FCPO? Pg 1
BenefitsofFCPO Pg1
Chapter 2 – Trading FCPO ExamplesofTradingScenarios Pg2–3
Orders–OrderTypes Pg4
Orders–ValidityConditions Pg5
Trading–OrderExecutionConditions Pg6
TradingStrategies Pg7
ApprovedCurrenciesDeposit Pg8
Chapter 3 – FCPO Tender OverviewofTenderProcess Pg9
NoticeofTender Pg10
NegotiableStorageReceipts(NSRs) Pg11
TenderAdviceandDeliveryAllocation Pg12
TenderRestrictionPeriod Pg13
TenderCycle Pg14
TenderCycleExample Pg15–16
Chapter 4 – About Bursa Malaysia CompanyProfile Pg17
WhatWeOffer Pg18
1
WHAT IS FCPO?
BENEFITS OF FCPO
BursaMalaysia’sCrudePalmOilFuturescontract,
orbetterknownasFCPO,hasbeentheglobalprice
benchmarkfortheCrudePalmOilmarketsinceOctober
1980.TheFCPOisadeliverablecontractwhichis
tradedelectronicallyonBursaMalaysia’strading
platform.Withanimpressivetrackrecordof30years,
BursaMalaysia’sFCPOpricehasbecomethereference
pointformarketplayersintheoilsandfatsindustry.
To manage price risk –plantationcompanies,
refineries,exportersandmillerscanusetheFCPO
tomanageriskandhedgeagainsttheriskof
unfavourablemovementsinthepriceofFCPO
inthephysicalmarket.
To speculate –traderscanusetheFCPOtogainleveragedexposuretomovementsinCPOprices.
To gain immediate exposure into the commoditymarket – viaFCPO,globalfundmanagersand
proprietarytradersareabletobepartoftheactive
commoditymarketinstantaneously.
Brochure-EnglishOpen Size: 210mm(H) x 297mm(W) / Close Size: 210mm(H) x 148.5mm(W)
2
CHAPTER2:TRADINGFCPO
EXAMPLES OFTradingScenariosSCENARIO 1 – Hedging
SCENARIO 2 – Arbitraging
Plantationcompaniesareperpetuallywithstockin
hand,thereforetheirriskexposuretothemarketwould
beenhancedindecliningmarkets.Apalmoilproducer
knowsthatinthreemonths,hiscropwillbereadytobe
harvested.However,heisworriedthatpricesmayfall
bythetimehecansellhisCPO.Hechoosestotradeon
BursaMalaysiaandhedgeshispositionbysellingthe
FCPOcontract.Indoingso,hehaseffectivelylocked-in
hissellingpricethreemonthslater.
Atradinghouserealisesthatthecorrelationpricesof
physicalpalmoilandtheFCPOmarkethasdeviated
fromitsusualspreads,andthattheFCPOistradingata
premiumtothephysicalmarket.ItdecidestosellFCPO
andbuyphysicalCPOtoarbitrage.Thepositionwillbe
liquidatedlateroncethespreadofthepricesbetween
bothmarketsreturnstonormal.
3
EXAMPLES OFTradingScenariosSCENARIO 3 – Trading
AMalaysianrefinerhasreceivedanordertodeliver
10,000metrictonsofprocessedpalmoil.However,
heonlyhasenoughCPOtofulfill80%ofthistransaction
andhasashortfallof2,000metrictons.Heturnstothe
physicalmarkettocoverthisshortfallbutisunableto
findanysellersinabullishmarket.Asthemarketis
anticipatinghigherprices,hepreferstobuyatthe
currentpricetoprotecthisprofitmargin.
HeturnstoBursaMalaysiaandbuys80contractsof
FCPO(80contractsx25metrictonspercontract=2,000
metrictons)attheprevailingprice.Hehasnoweffectively
locked-inhisbuyingpriceandwillwaitforthetender
processtotakeplacetocollectthephysicaldelivery
ofCrudePalmOil.
Brochure-EnglishOpen Size: 210mm(H) x 297mm(W) / Close Size: 210mm(H) x 148.5mm(W)
4
ORDERSOrderTypesLimit Order
Market Order
Market On Opening Order
Stop Order (Stop Loss and Stop Limit)
Market-To-Limit Order
Alimitorderisanorderwhichstipulatesaprice.Buylimitordersshallbematchedatthestipulatedpriceorlowerandselllimitordersshallbematchedatthestipulatedpriceorhigher.
Amarketorderisanorderthatisenteredwithnopricestipulation.Itwillbematchedatthebestavailableoppositepricetothefullestextentimmediatelyuponitsentry.
OrdercanonlybeenteredinthePre-Openingphase
Tobeexecutedattheauctionprice
StopLoss–becomesmarketorderoncetriggered
StopLimit–becomeslimitorderoncetriggered
Anorderwithnopricestipulation
Abuymarket-to-limitordershallbematchedimmediatelyatthelowestsellprice
Asellmarket-to-limitordershallbematchedimmediatelyatthehighestbuyprice
Thereafter,anyremainingunexecutedquantityoftheordershallbeconvertedintoalimitorderatthematchedprice
5
ORDERSValidityConditionsGood For Day
Good Till Date
Good Till Cancel
Session
Validforthetradingday
Validuntilaspecifieddate
Validuntiltheorderiscancelled
Validforthetradingsession
Brochure-EnglishOpen Size: 210mm(H) x 297mm(W) / Close Size: 210mm(H) x 148.5mm(W)
6
TRADINGOrderExecutionConditionsFill and Kill
Minimum Quantity
Unmatchedportionoftheordershallbeautomaticallycancelledbythesystem
Aspecifiedminimumquantityoftheordershallbeexecutedimmediatelyuponentryoftheorder,failingwhichthewholequantityoftheordershallbecancelled
7
TRADING STRATEGIESAstrategyisacombinationofanumberofbuyand/orsellorders
ofsimilarordifferentcontractscreatedwithintheframeworkof
asingleorder.
Exchange Defined Strategies (EDS)
User Defined Strategies (UDS)
Strategiespre-definedbytheExchangeandreadilytradable
TheEDSdefinedinthetradingsystemareCalendarSpreadandStrip
CalendarSpreadEDSareforthefirstfournearestcontractmonths
SixCalendarSpreadEDSareavailableatanyonetimeforeachandeveryfuturesproduct
Atradermaydefinehisownstrategyotherthanthosepre-definedbytheExchange
TheUDSwillbebroadcastedtothemarketforinterestedpartiestotrade
Brochure-EnglishOpen Size: 210mm(H) x 297mm(W) / Close Size: 210mm(H) x 148.5mm(W)
8
APPROVED CURRENCIESDEPOSIT (forInitialMarginonly)
AustralianDollar(AUD)
BritishPound(GBP)
Euro(EUR)
HongKongDollar(HKD)
JapaneseYen(JPY)
MalaysianRinggit(MYR)
Renminbi(RMB)
SingaporeDollar(SGD)
USDollar(USD)
Note:
1.PleasenotethatallcurrencydepositsforInitialMarginaresubjectedtohaircutrates
asdeterminedbyBursaMalaysiaDerivativesClearingfromtimetotime.
2.VariationMarginsaretobepaidinRinggitMalaysia(RM).
9
TenderNotification
e-NegotiableStorageReceipts(e-NSRs)
TenderAdviceandDeliveryAllocation
TenderRestrictionPeriod
TenderCycle:PaymentsandMargins
TenderCycleExample
CHAPTER3:FCPOTENDER
OVERVIEW OFTENDER PROCESSPhysicalDeliveryandTenderProcess
Brochure-EnglishOpen Size: 210mm(H) x 297mm(W) / Close Size: 210mm(H) x 148.5mm(W)
10
TENDER NOTIFICATIONParticipantswithspotmonthshortpositionsmaysubmitTenderNotificationsforthedeliveryofCPOduringthetenderperiod(1st–20thofspotmonth)
ParticipantsholdingFCPOpositionsafterthe15th
ofthespotmonthcontractareobligatedtomakeoracceptdelivery
AllTenderNotificationsmustbeaccompaniedbye-NegotiableStorageReceipts(e-NSRs)
TenderNotificationsmustbesubmittedtotheClearingHouseby12.00p.m.forsamedayprocessing
11
AsellerwhointendstohaveCPOappraisedfordeliverytothemarketmustdelivertheCPOtoaPortTankInstallationapprovedbytheExchangelocatedatPortKlang,ButterworthandPasirGudang
Eachtendermustbeinunitsof25metrictonnesormultiplesthereof
UponappraisaloftheCPO,thePortTankInstallationOwnershallissueane-NSR,whichwouldstipulatethefollowing:
•NameandLocationofPortTankInstallationOwner
•Dateofappraisal
•Certificationofqualityofoil
•Validitydateofthee-NSR
e-NEGOTIABLE STORAGERECEIPTS (e-NSRs)
Brochure-EnglishOpen Size: 210mm(H) x 297mm(W) / Close Size: 210mm(H) x 148.5mm(W)
12
TENDER ADVICE ANDDELIVERY ALLOCATION
BasedonthenumberofTendersNotificationreceived,theClearingHousewillallocateTenderAdvicetotherespectiveBuyingClearingParticipantsonaproportionatebasisattheparticipant’slevel(basedonnumberofopenpositions)
TenderAdviceisthenallocatedonarandombasisat client’slevel
TheClearingHousewillbroadcastthedeliveryallocationmessageandtransmitthereportelectronicallyby4.00p.m.
13
RestrictiononclosingoutofpositionforspotmonthcontracttakeseffectonebusinessdaybeforethestartoftheTenderPeriodandlastsuntiltheendoftheTenderPeriod.
Duringtherestrictionperiod,spotmonthopenpositionsmayonlybeclosedoutwithnewtradesfortheday.
Duringthetenderperiod,BuyingParticipantswhointendtocloseouttheirpositionsanddonotwishtoparticipateintheTenderProcessmustperformmanualmatchoutbefore2.30p.m.
TENDER RESTRICTIONPERIOD
Brochure-EnglishOpen Size: 210mm(H) x 297mm(W) / Close Size: 210mm(H) x 148.5mm(W)
14
TENDER CYCLEPAYMENTSANDMARGINS
DeliverycycleforFCPOtenderistwobusinessdays
BuyingParticipantwillpaythetenderamountandSellingParticipantwillreceivepaymenttwobusinessdaysaftertender
PerformancebondisonlyimposedontheBuyingParticipantduringthedeliverycycle
15
OnTenderDay(atEODprocess)
• TenderfeespostedtobothBuyerand Selleraccounts
• VariationMarginpostedtobothBuyerand Selleraccounts
• PerformancebondonlypostedtoBuyer’saccount
OnTender+1Day(atEODprocess)
•TenderValuepostedtobothBuyerandSeller accounts
•PerformancebondnolongerpostedtoBuyer’s account.Positionsunderthetenderprocesscanstill beviewedasOpenPositionunderDeliverybutnot includedinOpenInterest
TENDER CYCLE EXAMPLE
Note:
1.EOD=EndofDay
Brochure-EnglishOpen Size: 210mm(H) x 297mm(W) / Close Size: 210mm(H) x 148.5mm(W)
16
OnTender+2Days
•e-NSRwillbereleasedtoBuyeruponreceiptof payment
•PaymentwillbepostedtoSeller
17
CHAPTER4:ABOUTBURSAMALAYSIA
COMPANY PROFILEBursaMalaysiaBerhadisanexchangeholdingunder
Section15oftheCapitalMarketsandServicesAct2007.
Thefullyintegratedexchangeoffersequities,derivatives,
bondsaswellasIslamicservicesandoperatesaninternational
financialexchangeinLabuan.
BURSA MALAYSIA DERIVATIVES BERHAD (BMD) is a
wholly-ownedsubsidiaryofBursaMalaysiaBerhadwhich
provides,operatesandmaintainsafuturesandoptionsexchange.
BursaMalaysiaDerivativesBerhadoperatesthemostliquidand
successfulcrudepalmoilfutures(FCPO)contractintheworld.
Inthelastquarterof2009,BMDenteredintoapartnershipwith
theChicagoMercantileExchange(CME)Groupwhichledtoan
acquisitionofanequityinterestinBursaMalaysiaDerivativesBerhad.
Thepartnershipincludedthelicensingofthesettlementpricesofthe
FCPOtoCMEandthetradingofBMD’sproductofferingsthrough
theCMEGlobex®electronictradingplatform.
Brochure-EnglishOpen Size: 210mm(H) x 297mm(W) / Close Size: 210mm(H) x 148.5mm(W)
18
WHAT WE OFFEREquity Derivatives
Financial Derivatives
Commodity Derivatives
FuturesontheFTSEBursaMalaysiaKualaLumpurCompositeIndex(FKLI)
OptionsontheFTSEBursaMalaysiaKualaLumpurCompositeIndex(OKLI)
SingleStockFutures(SSF)
3-MonthKualaLumpurInter-BankOfferRate(KLIBOR)Futures(FKB3)
3-YearMalaysianGovernmentSecuritiesFutures(FMG3)
5-YearMalaysianGovernmentSecuritiesFutures(FMG5)
CrudePalmOilFutures(FCPO)
OptionsonCrudePalmOilFutures(OCPO)
CrudePalmKernelOilFutures(FPKO)
USDCrudePalmOilFutures(FUPO)
(as
at 1
3.08
.12)