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Thai bourse changes stock futures’ position limit for better portfolio management
The Thailand Futures Exchange, under The Stock Exchange of Thailand group, changes its stock futures’ position limit from a single level of 20,000 contracts to 20,000–435,500 contracts, thus enabling investors to manage their portfolios more effectively.
BANGKOK, January 8, 2013 – The Thailand Futures Exchange PCL (TFEX), announced that from January 14, 2013 onwards, it will adjust the position limit for stock futures from 20,000 contracts for all stock futures to a proportion of the listed shares of the underlying stocks. This method will better reflect the size of the underlying securities, and this method is also used in Korea, Taiwan and India. For example, currently an investor can only hold no more than 20,000 contracts of BTS futures, but under the new regulations, this limit will be 108,300 contracts, said TFEX Managing Director Kesara Manchusree.
TFEX will review and announce the position limits every 6 months for stock futures trading during the first half (January-June) and second half (July-December) of the year. After announcing, if the outstanding shares of the underlying securities changes more than 10 per cent, TFEX will review the new limits for that stock futures. To minimize the impact to investors, TFEX will allow investors to hold their existing position until expiration if the newly announced limit is lower than their existing position. Investors can view the new position limits at www.TFEX.co.th.
In the first week of 2013, the daily average volume of 30 stock futures was at 24,251 contracts, a 174% increase from the 8,849 contracts in 2012. The five most active stock futures in the first week were TMB futures, LH futures, KTB futures, ITD futures, and QH futures.
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