Published On: Mon, Aug 13th, 2012

Thailand Futures Exchange to Modify SET50 Index Futures

Thailand’s Futures Exchange (TFEX), under The Stock Exchange of Thailand group, plans to improve its SET50 Index Futures and Options, and also to introduce Sector Index Futures in October.

The contract specifications of SET50 Index Futures and Options will be modified. For SET50 Index Futures, two nearest monthly contracts will be added on top of existing four quarterly contracts, resulting in six contract months in total.

SET50 Index Options will also be added two contract months, but the two farthest quarterly months will be removed. The new contracts will suit with investor trading behavior and will be in line with index products of other exchanges in the region, said Kesara Manchusree, Managing Director of TFEX.

In addition, strike price interval of SET50 Index Options will be increased from 10 points to 25 points.

Currently, SET50 Index Options has at least 5 in-the-money, 1 at-the-money, and 5 out-of-the-money series (5:1:5). The adjustment will reduce the number of series to 2:1:2. These changes are expected
to boost liquidity of SET50 Index Options, Kesara added.

TFEX also plans to introduce Sector Index Futures at the same time in October.

Initially, there will be 5 major sectors, which are Banking (BANK), Information & Communication Technology (ICT), Energy & Utilities (Energy), Food and Beverage (Food), and Commerce (COMM). These five sectors account for 67% combined market capitalization of Thai stock market.

“Sector Index Futures will benefit not only investors in rebalancing their portfolios, but also securities companies in enabling them to manage risk from issuing Sector Index related product.” Kesara said, in order to make investors ready to trade in Thai derivatives products, TFEX and brokers have cooperated to arrange a series of seminar focusing on technical analysis

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