TFEX’s New SET50 Futures, SET50 Options, Sector Futures To Debut On October 29

12/09/2012

Thailand Futures Exchange (TFEX), under The Stock Exchange of Thailand group, is ready to launch the new versions of SET50 Index Futures and SET50 Index Options, and to introduce Sector Index Futures on October 29, 2012, in order to provide more investment choices for investors and boost market liquidity.

“We believe the three new derivatives products will be beneficial to investors and will meet their demands. The new versions of SET50 Index Futures and SET50 Index Options will boost liquidity in the market, while Sector Index Futures will provide investment opportunities and benefit from the movement of stocks in five major sectors with more convenience, and cost-efficiency,” said Kesara Manchusree, Managing Director of TFEX.

The modified SET50 Index Futures will enable investor to efficiently manage short-term volatility of the SET50 Index. Under the new version, two nearest monthly contracts will be added. Therefore, there will be six contract months, which are three nearest consecutive monthly contracts, and next three quarterly contracts. On October 29, SET50 Index Futures will be three monthly contracts – November 2012 (S50X12), December 2012 (S50Z12), January 2013 (S50F13), and three quarterly contracts – March 2013 (S50H13), June 2013 (S50M13), and September 2013 (S50U13), respectively.

For SET50 Index Options, two contract months will be added, but the two farthest quarterly months will be removed, resulting in four contract months. There will be three nearest consecutive monthly contracts, and another one quarterly contract, which are November 2012 (X12), December 2012 (Z12), January 2013 (F13), and March 2013 (H13) contracts traded on October 29.

In addition, strike price interval of SET50 Index Options will be increased from 10 points to 25 points, so that SET50 Index Options will have 2 in-the-money, 1-at-the-money, and 2 out-of-money, or in series of 2:1:2. The modification should boost trading liquidity and volume as it will reduce the number of contracts and complexity involved. Existing contract months generated before October 29 can be traded and held until expiration.

Sector Index Futures, tracking the movement of SET sectoral indices, initially cover five major sectors, which are Banking (BANK), Information & Communication Technology (ICT), Energy & Utilities (ENERG), Food and Beverage (FOOD), and Commerce (COMM), as these are the top picks of investors. Since these sectoral indices move in line with their constituent stocks, TFEX expects Sector Index Futures will help investors to rebalance their portfolios and manage risks. “If there is much desire for Sector Index Futures in other sectors, we will consider adding them as demand develops,” Kesara added.

TFEX will join hands with Thailand Securities Institute to hold a seminar providing information on these three new products on September 18 from 01:00 to 04:00 p.m. at the SET building. For more information on the seminar, please contact www.tsi-thailand.org.