07/08/2024 (Finance Feeds) - Interactive Brokers has opened access to listed derivatives on Bursa Malaysia, which has been actively promoting growth and participation from retail investors, especially the younger generation.

Clients of the automated global electronic broker can now trade Crude Palm Oil Futures (FCPO) and FTSE Bursa Malaysia KLCI Futures (FKLI) alongside global stocks, options, futures, currencies, bonds, funds, and more from a single unified platform.

IBKR adds Crude Palm Oil and FTSE Bursa Malaysia futures

FCPO is a Ringgit Malaysia (MYR) denominated Crude Palm Oil Futures Contract traded on Bursa Malaysia Derivatives, providing market participants a global price benchmark for the Crude Palm Oil Market since October 1980. For over 40 years, FCPO has been actively used by edible oils and fats industry players as a risk management solution, as well as by fund managers and financial institutions for managing price fluctuations in the market.

FKLI is a Ringgit Malaysia (“MYR”) denominated FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) Futures Contract traded on Bursa Malaysia Derivatives, providing market participants exposure to the underlying FBM KLCI constituents. Both institutional and retail investors actively use FKLI in their respective trading portfolios.

“IBKR clients can trade on over 150 markets”

Interactive Brokers offers global market access, advanced technology, and competitive pricing, benefiting self-directed individual and institutional investors. In addition to Crude Palm Oil and FTSE Bursa Malaysia KLCI futures, Interactive Brokers plans to add other Bursa Malaysia products in the future.

David Friedland, Head of APAC for Interactive Brokers, said: “The introduction of Bursa Malaysia listed derivatives underscores our commitment to expanding the breadth of products available on our platform. Interactive Brokers clients worldwide can trade on over 150 markets using a broad array of tradable instruments, and we are pleased to add these new products to further improve our clients’ trading opportunities and strategies.”

Bursa Malaysia, one of the largest bourses in ASEAN, has successfully attracted global brokerage firms to its roster of securities and derivatives broker members as part of its efforts to grow retail participation.

As of Q1 2024, local retail investor participation in the securities market stood at 22%, while participation in the derivatives market stood at 17% for FKLI and 25% for FCPO respectively.

The new dynamics are also attracting the wider trading industry to Malaysia. Webull just launched its discount brokerage in the country, providing access to trade Bursa Securities and Bursa Derivatives alongside US-listed stocks and exchange-traded funds (ETFs) via the Webull Malaysia app. Last month, the broker secured a Capital Markets Services License for Dealing in Securities (restricted to listed securities) and Dealing in Derivatives from the Securities Commission Malaysia.

IBKR’s ForecastEx has gone live

IBKR recently announced that its new CFTC-regulated subsidiary, ForecastEx, has gone live with its Forecast Contracts on upcoming economic data releases and climate indicators.

Forecast Contracts through ForecastEx facilitate a unique trading approach, allowing investors to hedge against or express conviction on the outcome of key economic and climatic events.

The contracts provide a direct method for investors to protect their portfolios from volatility related to economic indicators or climate patterns. They are especially relevant for those invested in cyclical stocks and sectors like industrials, consumer discretionary, and real estate, which are highly sensitive to economic fluctuations.

If an investor believes an event will occur, such as an increase in the US Consumer Price Index above a specific value, they can buy a “yes” contract. Conversely, if they think the event will not happen, they can purchase a “no” contract. Contract purchase prices range from $0.02 and $0.99.

The value of these contracts will continue to fluctuate based on market participants’ evolving judgment of probabilities, directly reflecting the collective market view of the likelihood of the event.

Upon the event’s resolution (e.g., when the US Bureau of Labor Statistics announces the CPI), the contract settles at a predefined value — $1 for a correct answer and $0 for an incorrect one.

ForecastEx contracts have weekly, monthly, quarterly, and annual durations. Interactive Brokers will pay interest at 0.5% under the prevailing Fed Funds rate on the closing market value of positions. Income interest accrues daily and is paid monthly, currently at a rate of 4.83% APR.

https://financefeeds.com/interactive-brokers-adds-listed-derivatives-on-bursa-malaysia/