MARKET DEVELOPMENT
Bursa Malaysia Derivatives\' Open Interest Hits All-time High
Bursa Malaysia Derivatives\' Open Interest Hits All-time High
26/07/2013 (Bernama) - Bursa Malaysia Derivatives (BMD) ended yesterday with two new historical record highs.
Open Interest (OI) for all products hit a new high of 251,994 contracts at the end of the day yesterday whilst Crude Palm Oil Futures saw 201,209 contracts remaining open at the end of the day.
"The growing open interest is a reflection of BMD's growing strength. This positive development is indicative of an elevated confidence in our derivatives market as well as interest in hedging the cash exposure using futures instruments by institutions," Bursa Malaysia Derivatives' Chief Executive Officer Chong Kim Seng said in a statement today.
Chong said the OI for all products and palm oil futures contracts on BMD have been consistently rising over the past four years.
All contracts saw a record high OI of 148,652 contracts in 2010, 187,580 in 2011, 214,065 in 2012 and now an increase of 18 per cent to 251,994 in just seven months of 2013.
Meanwhile, OI on palm oil futures registered a historical high of 91,035 contracts in 2010, 143,338 contracts in 2011, 173,649 contracts in 2012 and now a 16 per cent increase to 201,209 OI this month.
Open interest reflects hedgers' collective position in the Futures Exchange, taken against their other exposures and positions in the physical markets and is critical to the success of a futures contract.
The higher the Open interest, the higher the hedgers' confidence in the facility.
Open Interest (OI) for all products hit a new high of 251,994 contracts at the end of the day yesterday whilst Crude Palm Oil Futures saw 201,209 contracts remaining open at the end of the day.
"The growing open interest is a reflection of BMD's growing strength. This positive development is indicative of an elevated confidence in our derivatives market as well as interest in hedging the cash exposure using futures instruments by institutions," Bursa Malaysia Derivatives' Chief Executive Officer Chong Kim Seng said in a statement today.
Chong said the OI for all products and palm oil futures contracts on BMD have been consistently rising over the past four years.
All contracts saw a record high OI of 148,652 contracts in 2010, 187,580 in 2011, 214,065 in 2012 and now an increase of 18 per cent to 251,994 in just seven months of 2013.
Meanwhile, OI on palm oil futures registered a historical high of 91,035 contracts in 2010, 143,338 contracts in 2011, 173,649 contracts in 2012 and now a 16 per cent increase to 201,209 OI this month.
Open interest reflects hedgers' collective position in the Futures Exchange, taken against their other exposures and positions in the physical markets and is critical to the success of a futures contract.
The higher the Open interest, the higher the hedgers' confidence in the facility.