A derivative or futures contract is a type of financial instrument designed to allow buyers and sellers to enter into an agreement to buy or sell an underlying asset in the future. These contracts specify key terms such as the type of asset, specifications, price, quantity, method of payment, and the contract’s expiration or settlement date.
The buyer is said to take a “Long” position, while the seller takes a “Short” position. The value of the derivative is based on the value of the underlying asset to which it is linked.
Investors are only required to place a margin of 5–20% of the contract value as collateral. The margin rate is determined by TFEX (Thailand Futures Exchange) and is divided into three levels: 1. Initial Margin Requirement (IM or MR): The minimum margin that must be deposited before an investor can open a position. 2. Maintenance Margin (MM): The minimum margin that must be maintained in the account. If the margin balance falls below this level, the investor will receive a Margin Call and must restore the margin to the Initial Margin level. 3. Intraday Force Close Margin (FM): If the total margin falls below this threshold during the trading day, the investor may be forced to close the position or must top up the margin within the day to avoid automatic liquidation.
Steps to Open a Derivatives Account Online
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1. Log in to "K-Cyber Trade" or "Streaming" Use your 6-digit Username and Password, then click “Login”
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2. Select the “My Service” Menu
3. Go to the “Open Additional Account” Section and Select “Derivatives Account”