Korea Exchange Preliminary Margin For USD Futures Lowered By 20%

In line with the recent steep fall in won-dollar exchange rate, Korea Exchange (KRX) has lowered preliminary margin for USD futures by 20% from 2 million won per contract to 1.6 million based on the latest exchange rate of 960 won per dollar, effective on February 6, 2006.

Preliminary margin should be deposited for each order prior to placing it in order to ensure settlement for a futures transaction. The reduction in the margin reflects the recent drop in won-dollar exchange rate.

How is the margin determined under the new margining rules? Under the new margining rules, preliminary margin per contract for USD futures which previously was a single fixed amount of 2 million won, is adjusted in link with exchange rate. Exchange Rate(won per dollar) / Preliminary Margin per Contract(million won)

• 750.00-850.00 / 1.30
• 850.00-950.00 / 1.45
• 950.00-1,050.00 / 1.60
• 1,050.00-1,150.00 / 1.75
• 1,150.00-1,250.00 / 1.90

If won-dollar exchange rate falls below 750.00 or rises to 1,250.00 or higher, 150,000 won will be deducted from or added to the base amount(1.3 million or 1.9 million won, depending on the exchange rate), for each 100.00 won change in exchange rate.