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Celebrate the Power of Investing in SET50 Index Futures
DBS Vickers Securities (Thailand) Co., Ltd. has obtained the approval as an agent of SET50 Index Futures Trading from the Securities
and Exchange Commission (SEC) and get approval to be membership of Thailand Futures Exchange (TFEX) and Thailand Clearing House (TCH)
DBS Vickers Securities is the subsidiary of DBS Group Singapore, one of the largest banking group in Asia. DBS Vickers Securities is now one of the largest securities and future brokerages in Singapore and also one of the leading retail brokerage in Asia.
SET50 Index Future (SET50IF) is a new investment and trading tool introduced by Thailand Future Exchange (TFEX). It is a future contract on SET50 index; an index that comprises the SET's top 50 stocks. There are many advantage in investing in SET50 Index Future.
Here are sometings you will want to know about trading futures in your account.
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- Free up your capital: SET50IF is a form of margin trading. Margin collateral required is a portion of the contract value.
SET50IF offers investors an alternative to stock investment and liquidity management.
- Protect against price risks: SET50IF allows greater flexibility, control and precision in protecting against the downside
risk of your investment by selling the respective SET50IF during periods when prices are expected to be volatile or decline.
As SET50IF is to facilitate risk and investment management, they allow investors the flexibility of either buying first or selling first.
Hence short selling is also possible and easy with futures, as all positions are settled by cash.
- Exploit new investment opportunities: Imagine buying SET50IF and simultaneously selling another to take advantage
of their relative movements. Imagine tailoring a stock basket of your choice within the SET50 and combine with investment in
SET50 Index Future to minimize risk. There are a number of possibilities and opportunities for investor to explore and exploit.
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| Capital outlay |
Usually 100% of market value. |
Partially depend on margin collateral required with daily adjustment of profits and losses in your derviatives trading account.* |
| Minimum price movements |
Price movements vary according to each market price level. |
0.10 Index point |
| Life span |
Stocks have no expiration date and can be held as long term physical deliverable instruments. |
Limited with all outstanding positions being settled by cash based on the final settlement price on the contract’s maturity date. |
| Account required to commence trading |
Stock trading account |
Derivatives trading account. |
| Servicing broker |
Stock brokers |
Futures Agent with future license. |
*Investor should understand the risks of leverage before using SET50IF as margin trading of SET50IF is different form stock trading.
With SET50IF, the contract value is several times lager than margin required. As such, changes in the value of an SET50IF can be large as
compared to the margin fund deposited with broker. When opening accounts, investors should also read and understand the Risk Disclosure
Document provided by their brokers.
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Day 1:
An investor deposit initial collateral of THB300,000 with Agent. |
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THB300,000 |
Margin required for SET50IF per contract.
Initial margin:THB30,000
Maintenance margin: THB25,000
(1 Index point = THB1,000) |
Day 2:
Investor Long 10 SET50IF contract @ 495 index point (at day end, close price = 500 index point) |
500.00 |
THB350,000 |
A profit of THB50,000 is credited to the account.
(500-495) x 1,000 x 10 = 50,000 |
Day 3:
Price of SET50IF decline |
492.00 |
THB270,000 |
A loss of THB80,000 is incurred. The outstanding balance is still more than the maintenance margin requirement of THB250,000 for 10 contracts.
(25,000 x 10 = 250,000) |
Day 4:
Price of SET50IF decline |
488.00 |
THB230,000 |
THB230,000 A loss of THB40,000 is incurred. The outstanding balance is less than maintenance margin requirement. Margin Call from Investor which the investor could perform one of the followings:
- Top up the margin account to the Initial Margin level of THB300,000 (THB30,000 per contract) or;
- Reduce the number of open interest to 7 contracts.
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Day 5:
Investor choose to top up account by THB70,000. At day end, no change in price from previous day. |
488.00 |
THB300,000 |
The account balance is restored to the minimum Initial Margin level. |
Day 6:
SET50IF rebounded
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492.00 |
THB340,000 |
A profit of THB40,000 is credited to the account.
(492-488)x1,000x10=40,000 |
Day 7:
Investor closes position by short all 10 contracts at 498 index point. |
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THB400,000 |
A profit of THB60,000 is credited to the account.
(498-492)x1,000x10=60,000 |
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Note: Commissions and related tax were not included in the example shown.The margin level is the sample number for using in this example only.
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| Underlying Index |
SET50 Index |
| Multiplier |
THB1,000
Contract value = Price x Multiplier |
| Settlement Months |
March, June, September and December/up to 4 quarters. |
| Trading hours |
| Pre-open |
: 09.15 a.m. – 09.45 a.m. |
| Morning session | : 09.45 a.m. – 12.30 p.m. |
| Pre-open | : 02.00 p.m. – 02.30 p.m. |
| Afternoon session | : 02.30 p.m. – 04.55 p.m. |
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| Minimum price fluctuation |
0.1 index point |
| Daily price limit |
+30% of the previous settlement price |
| Final trading day |
The business day immediately preceding the last business day of the contract month. |
| Type of Contract |
Cash settled |
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To open an account with us, you will need to complete an account opening form, which available at DBSV upon request.
You will also need to provide us the following documents:
Individual
1. A certified true copy of valid ID Card or Passport (for foreign investor).
2. A certified copy of House Registration Certificate.
3. A certified copy of work permit (for foreign investor who work in Thailand).
4. A certified copy of your recent bank statement showing transaction over the last 6 months.
5. Cash collateral for Initial margin.
Juristic Person
1. A certified true copy of Affidavit not later than 3 months.
2. A certified copy of shareholder list.
3. A copy of Minutes of Board Resolution approving to open derivatives trading account.
4. List of authorized person or Power of Attorney to appoint an authorized person to operate your account.
5. A certified copy of valid ID Card and House Registration Certificate of authorized persons.
6. A copy of Audited Financial Statement over the last 1 year.
7. Cash collateral for Initial margin.
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Disclaimer:
There are profit opportunities as well as risks in trading futures as a result of market fluctuations. Investors should understand
such instruments and their risks when investment in them.
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