The Thailand Futures Exchange Plc (TFEX), a subsidiary of the Stock Exchange of Thailand (SET), will raise margin rates on SET50 index futures and gold futures due to higher market volatility. The new rates will be effective from August 19, 2011.
“Economic problems in the United States and Europe trigger worries among investors, causing them to adjust their portfolios and diversify into safe-haven assets, especially gold. That spurs fluctuation in gold and equity trading,” said TFEX Managing Director Kesara Manchusree. “Thus, margin rates will be raised to cope with market volatility.”
After the revision, the new margin rates of retail clients for SET50 index futures will be THB 53,200 per contract, up from THB 38,000. For 50-Baht gold futures, the new margin rates will be THB 62,700 per contract, from THB 47,500; meanwhile 10-Baht gold futures’ margin rates will be increased to THB 12,450 per contract, from THB 9,500.
However, silver futures’ margin rates will be cut to THB 21,850 per contracts, from THB 29,450 and margin rates of single stock futures will be adjusted depending on the volatility of their respective underlying stocks.
“Such adjustment is a normal practice of clearing houses, with margin rates rising if futures prices are highly volatile, and dropping if futures prices become less volatile. Investors should be informed and aware that margin rates could be adjusted frequently to correspond to market volatility. ” Kesara concluded.
