Derivatives | DBS Vickers Securities (Thailand)

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Derivatives

Trade derivatives through DBS

and receive personalized professional advices.

A derivative is a financial security with a value that is relying upon an underlying asset or group of assets. The derivative itself is a contract between two or more parties based upon the asset or assets. Its price is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes.

You can trade derivatives through a member firm of Thai Futures Exchange (TFEX) which serves as a broker for your trading requirements and provide you with product knowledge and information. Products on TFEX are mainly divided into two categories.

Futures

A futures contract is a legal agreement to buy or sell a particular commodity or asset at a predetermined price at a specified time in the future. Futures contracts are standardized for quality and quantity to facilitate trading on a futures exchange. The buyer of a futures contract is taking on the obligation to buy the underlying asset when the futures contract expires. The seller of the futures contract is taking on the obligation to provide the underlying asset at the expiration date.

Options

Options are a financial derivative sold by an option writer to an option buyer. The contract offers the buyer the right, but not the obligation, to buy (call option) or sell (put option) the underlying asset at an agreed-upon price during a certain period or on a specific date. The agreed upon price is called the strike price. American options can be exercised any time before the expiration date of the option, while European options can only be exercised on the expiration date (exercise date). Exercising means utilizing the right to buy or the sell the underlying security.

DBS Vickers Securities (Thailand) has received the brokerage license for future products from the SEC and is a full member of TFEX and Thai Clearing House. DBS is licensed to offer eight types of future products as follow:

SET50 Index Futures
SET50 Index Options
Single Stock Futures
Gold Futures/Mini Gold Futures
Gold Online Futures

Interest Rate Futures
USD Futures
Rubber Futures
Sector Futures

Highlights of products

Speculate and make a profit if the value of the underlying asset moves the way they expect. (e.g. moves in each direction, stays in or out of a specified range, reaches a certain level)

Hedge or to mitigate risk in the underlying, by entering into a derivative contract whose value moves in the opposite direction to their underlying position and cancels part or all of it out.

Obtain exposure to the underlying where it is not possible to trade in the underlying. (e.g., weather derivatives)

Provide leverage (or gearing), such that a small movement in the underlying value can cause a large difference in the value of the derivative.

Switch asset allocations between different asset classes without disturbing the underlying assets, as part of transition management.

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