DERIVATIVES

Derivatives are financial securities whose value is derived from another "underlying" financial security. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes.

By law, Thailand Futures Exchange Plc (TFEX), is allowed to trade futures, options, and options on futures. The permitted underlying products include:

Equities and other securities indices;

Debt instruments and interest rates;

Non-agricultural commodities and other financial indices (e.g., gold, crude oil and foreign currencies)

Source: The Stock Exchange of Thailand (www.set.or.th)

Product Description

SET50 Index Futures

The SET50 Index Futures is intended to be a useful hedging tool to manage the equity market risks and to provide investors with alternative investments as another means to profit from the accuracy of their index predictions. It can also used for adjusting investors’ exposure to the equity market. Target users include mutual funds and institutional investors as well as individual retail investors. Trading in SET50 Index Futures has a substantially lower transaction cost when compared to trading individually in the basket of 50 stocks.

SET50 Index Options

SET50 Index Options offered investors an opportunity to both capitalize on anticipated market movements and limited the risks of adverse market direction. Investors can also use SET50 Index Options to protect the value of their equity portfolio.

SET50 Index Options are European-style options, settled in cash against the value of the SET50 Index on the last trading day. It is approximately 1/5 the size of SET50 Index Futures. There are SET50 Index put and call options with different exercise prices for various trading strategies.

Gold Index Futures

Gold Futures is the alternative investment tool which relies on the gold price movement. The investors can benefit from the gold futures investment by making profit from both directions either up or down side which is like SET50 INDEX futures trading. In addition, Gold futures can also hedge against gold price fluctuation or stock market volatility due the negative correlation to the stock market. This will provide a greater opportunity to make profit when stock market decline during the economic downturn.

Gold Futures in Thailand is the futures contract which relies on the gold bullion with the purity of 96.5% due to the popularity among buyers nationwide in gold physical trading.

Single Stock Futures

Single Stock Futures are futures contracts on selected individual stock listed on the Stock Exchange of Thailand (SET)

Buying or Selling a Single Stock Futures contract is equivalent to buying or selling 1,000 underlying stocks at an agreed price now for final settlement at a future date when the contract matures. However, futures positions may be closed out at any time before the maturity date with offsetting trade.

Collaterals & Margin

The initial collateral in the form of deposit will be hold before the buy/sell orders for derivative products can be made. If clients gain profit in their portfolio, that profit shall be transferred to clients’ trading account. On the other hand, in case of loss, the initial collateral will be deducted until it reaches “minimum required collateral” and then will call for additional margin

Commission

The commission for derivatives products is different from normal stocks trading. Kasikorn Securities will charge commission base on number of contacts clients buy/sell using the company’s platform. The commission rate is reduced when number of contracts reach minimum threshold.

EQUITY

The equity instrument is raised by a corporation through the issue of shares entitling holders to an ownership interest. The holders are granted with special privileges base of the class of shares and may earn dividend in return of corporation’s performance

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DERIVATIVES

Derivatives are financial instruments which derive from some other asset, index, and value (underlying asset). Basic derivatives include options, swap, forward and futures

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Online Services

To response to clients’ needs for the used of online and electronic channel, Kasikorn Securities have focused and continued to improve both capability and capacity of it with the concept “Simply Intelligent”

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Other Services

To response the increased demand of our clients and being ahead of the industry, Kasikorn Securities have setup Financial Product Development team in order to continuously improve and expand our best of breed products and services.

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