Trading Products
Cryptocurrency
As opposed to traditional fiat currencies, cryptocurrencies are a form of digital currency secured by cryptography, allowing individuals to transmit them in a virtual setting, anytime and anywhere. Cryptocurrencies are decentralized with no overarching regulatory body.
The Bitcoin, launched in 2009, was the first cryptocurrency. Other examples of cryptocurrencies are Ethereum, Litecoin, Ripple and etc.
A blockchain is a database that functions as a decentralized virtual ledger, existing on a network of many computers. Data is arranged chronologically in blocks and each block’s metadata contains information linking it to the previous one. As such, once data has been stored, any modifications or deletions will be almost impossible.
No, you do not need to set up a virtual wallet.
All cryptocurrency trades made are Futures. Hence, you will not own the underlying physical cryptocurrency.
You will be able to go both long and short for all cryptocurrencies products offer
It is important for customers to know the inherent risks and characteristics of Bitcoin Futures. As with any investment product, customers are responsible for their own risk management.
- Bitcoin is a relatively new product and is known to be volatile. As much as 30% of price movement has been recorded within a trading day.
- Bitcoin cash trades 24 hours including weekends. However, its Futures contracts listed in CME have specific trading hours. This may result in wide price gap that could potentially be as high as 25% or beyond.
- Liquidity is also an inherent risk for Bitcoin Futures. Near month Bid/Offer spreads had been recorded to be as wide as 120 points, and up to 1000 points for the far month expiry.
- Please note that there will be no call in trading support for Bitcoin contracts. Customers would need to manage the possible risks and choose to trade during active hours.
Do note that the Initial margin (IM), which is based on CME daily settlement price, may experience huge fluctuations daily.
Contract For Difference (CFDs)
Click here to view the CFDs FAQ.
Commodities
Commodities trading involves undertaking an agreement to buy or sell a set amount of a commodity at a predetermined price and date. Buyers use these to avoid the risks associated with the price fluctuations of the products or raw materials while sellers try to lock in a price for their products.
We offer commodity products in three main categories:
- Energy Futures contracts: Crude Oil, Brent Crude Mini Crude Oil, Natural Gas, Mini Natural Gas, Kerosene, Gasoline and Crude Palm Oil.
- Metal Futures contracts: Gold, Mini-sized Gold, Silver, Mini-sized Silver, Copper, Palladium, and Platinum.
- Agricultural Futures contracts: Corn, Soybeans, Soybean Oil, Soybean Meal, Oats, Wheat, Cotton, Cocoa, Coffee and Sugar.
Futures contracts are traded on an intra-day “First In, First Out” (FIFO) basis. This means that for an intra-day trade, a customer’s first position bought or sold will be the first to be liquidated.
Example (FKLI):
Glenn bought 2 contracts of December FKLI on 2 different days:
- Day 1 purchase price: 1,965.0
- Day 2 purchase price: 1,960.0
Before the end of the main trading session of Day 2, he proceeds to close 1 contract at 1,963.0.
Under the FIFO rule, Glenn’s Day 1 contract (1,965.0) will be liquidated first.
- Close price: 1,963.0
- Entry price (Day 1): 1,965.0
- P/L = –2.0 points × RM50 = –RM100 (loss)
The Day 2 contract (1,960.0) remains open.
Please refer to the relevant exchange website and search for the particular contract specifications or you can refer to the margin list
Option
Trading options gives the buyer the right but not the obligation to either buy or sell a specific asset at a predetermined price on a future date.
It differs from futures trading as the options’ purchaser has no obligation to either buy or sell for the exercise price and will do so only if it is profitable.
Options are flexible instruments because they allow you to tailor the exact exposure and risk you wish to have for an anticipated move in the options price.
Trading options allows an investor to gain leverage in a contract without committing to a trade. Furthermore, risk is limited to the option premium for the buyer of an option. (Writers of options face unlimited downside risk.) In addition, trading options allows investors to protect their positions against adverse price fluctuations when it is not desirable to alter the underlying position.
Writing an option provides one with an additional source of income arising from the premium one receives from the buyer of the option. The premium also serves as a cushion against the risk exposure one would incur.
For example, if you write a call option in anticipation of a decline in the price of an underlying, you will reduce your potential capital loss by the amount of premium you receive. However, if you expect the price of a particular underlying to rise, you may wish to write a put option and earn the premium as the put option holder will not exercise his right.
Options is both an exchange traded product and an OTC product.
No, because the value of the Option will depreciate with time and is worth nothing once expired.
The exercise style of an option does not prevent an investor from closing the position by engaging in a closing transaction on an exchange up to and including the last trading day for the contract. A long (purchased) option contract can be closed by one of two methods: entering into a closing sale at an options exchange, or by exercising the contract. A European exercise style option can only be exercised at expiration so the only way to close your position prior to expiration is to execute a closing trade.
Index options can have different exercise styles and trading hours. Option holders would want to be certain that they know the difference between closing an open option position by exercising the contract, and closing the position via a trade on an exchange. Even the last trading day for expiring options can vary. The contract specifications of these index products contain important trading information regarding these options.
Gold/Silver
Phillip Nova has the following Gold/ Silver products for trading:
1. Bursa Gold Futures (FGLD)
2. JPX Gold and Mini Gold (JAU & MINIJAU)
3. JPX Silver (JSV)
4. COMEX 100oz Gold, Mini Gold, E-Micro Gold, 1-Ounce Gold (GD, QO, MGC &C10Z)
5. COMEX 5000oz Silver, Mini Silver and Micro Silver (SV, ID & SIL)
Can't find what you are looking for?
Should you have any query, you may contact us at 03-2783 0388 or
email us at pcsb_enquiry@phillipcapital.com.my
