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Gold Futures (FGLD) Overview

On November 7, 2013, Gold Futures (FGLD) had been launched and traded on Bursa Malaysia with the value of RM1,000 per contract. This is a chance for participants to be exposed to international gold price movement.

Gold Futures FGLD Price movement per contract

What is Gold Futures (FGLD)?

FGLD is a small-sized Ringgit denominated contract, consisting of 100 grams of gold.Each contract to be valued at RM1,000. The pricing of FGLD contract is according to the LBMA Gold Price AM Price.

The settlement of FGLD is upon its expiry and is cash-settled based on the price of gold on the final trading day in Ringgit Malaysia. The value of the cash settlement will be calculated using the LBMA Gold Price AM Price.

Contract Months

The period of the contract month is 12 calendar months. Months that are specifically covered are the current month or sometimes called spot month, next three consecutive months, and also all event months which are February, April, June, August, October, and December.

Generally, the price of gold is most volatile in the spot month. However, participants have the right to also trade in contract months listed further in the future.

Though the price of the gold futures is benchmarked based on LBMA Gold Price AM Price, the business days is based on Kuala Lumpur business days. On Monday to Friday, the business session got 2 sessions which are morning session and evening session. The morning session starts at 9.00 am and ends at 12.00 pm whereas the evening session is from 2.30 pm until 7.00 pm.

The FGLD accept various currencies for margins such as MYR, USD, GBP, HKD, JPY, RMB, SGD, and also AUD. However the variation margins will be only paid in Ringgit Malaysia (MYR).

In each trading, the initial margin is to be deposited first with Future Broker. The Initial margins are subjected to hair cut rates based on Bursa Malaysia Derivatives Clearing from time to time.

Reasons To Trade FGLD

Global Access

As the FGLD is traded on CME (Chicago Merchantile Exchange) Globex, an electronic platform, trader can enjoy trading anywhere on the globe. They will be provided with access to trade Bursa Derivatives products using the CME Globex platform.

Secure and Regulated

FGLD is a secure transaction as the contract on Bursa Malaysia Derivatives is being under surveillance of Securities Commission of Malaysia and protected under Capital markets and Services Act 2007. Meanwhile, Bursa Malaysia Derivatives Clearing assures the margin deposits and payments of futures contract while regulate the futures brokers’ transactions.

Leveraged Trading

This leveraged trading helps you to have a greater exposure to gold at a fraction of the total value though the notional value a.k.a Initial Margin is small. The initial margin usually fluctuates according to the volatility of the gold price.

Benefit From the Bull and Bear Market

Futures traders are able to make money even in a falling market provided with good discipline and appropriate guidance. This is a total flip of usual stock trading. The traders are able to take action based on the view of prices in the future. If the price is expected to go down, the futures traders can lock the current price that is expectedly higher that the future price and make the selling transaction prior to the declining market.

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Reference: Bursa Malaysia Derivatives

DISCLAIMER: This post is written for general information only. The author, publisher and/or any third party involved in the distribution of this work assume no legal responsibilities and shall have no liability whatsoever for any direct or consequential losses, costs or expenses arising from the use of the information contained herein.

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