.jpg)
- WSE is set to change WIG20 futures multiplier from PLN 10 to PLN 20
- WSE plans to commence trading in futures with the new multiplier in September this year
- At a later date, WIG20 futures will be replaced by WIG30 futures
More than 14 years after the introduction of the first derivatives, namely WIG20-based futures, WSE has decided to change the multiplier for these instruments. The multiplier, or the parameter defining the value of one index point, will be increased from PLN 10 to PLN 20. According to schedule, the launch of trading in contracts using the new multiplier is planned for September this year. The date on which trading in the new instruments will commence will be publish in the relevant WSE Management Board’s resolution.
As a result of the change of multiplier, the nominal value of a contract and the value of the minimum change of a contract price will double to PLN 20. Thus, a change in the contract price of one index point will mean a gain or loss for the investor of PLN 20 instead of the current PLN 10 (profit / loss net of fees). The most important advantage of the new contracts is that the value of a single quotation step will double relative to currently traded contracts, which will greatly improve the cost attractiveness of the contract. Assuming that fees charged to investors remain unchanged, investors will be able – for the first time – to obtain a positive return following a price change by 1 index point. Against a background of very low volatility of contract prices, which has been the case for a long time now, this change may prove to be of fundamental importance for stock market investors.
‘The change in the WIG20 futures multiplier is part of a wider strategy of the Warsaw Stock Exchange aimed at providing stimulus and promoting further growth in the derivatives market. The new solutions that we have put forward are intended to improve the attractiveness of our instruments to investors and to increase liquidity and thus to increase the security of investing and reduce transaction costs,’ said Adam Maciejewski, President of the WSE Management Board.
WIG20 futures with the PLN 20 multiplier will eventually replace the instruments currently listed. Migration to contracts with the new multiplier will take place gradually. The schedule provides for a parallel trading of PLN 10 and PLN 20 multiplier contracts. Investors will have given time to learn the benefits of the new instruments and to transfer their positions in current contracts to new contracts. In addition, as the September series of PLN 10 multiplier futures (series FW20U13) expires, no new series of these contracts will be launched. The last series of PLN 10 multiplier futures is going to be the FW20M14 series. Completion of the migration to the new contracts is planned for no later than 20 June 2014. The migration process could be shorter if no open positions are left in any of the last series of futures contracts that are currently available for trade. If this happens, it will be possible to suspend trading in these series until their expiry and, as a result, migration may be completed earlier.
The operating fees that will be charged by the WSE to members of the Stock Exchange for trading in new contracts will remain the same as the fees that apply at present (this applies to fees charged for session transactions, for bulk transactions as well as those charged to market makers). WSE is not planning to increase fees on new contracts. If the final fees charged to investors remain unchanged, investors will benefit from a significant increase in the attractiveness of the new instrument.
Details on WIG20 futures with the PLN 20 multiplier can be found on our website: www.wse.com.pl
