Help and Support

Futures

Request demo account

To request for a Futures Demo Account, call our Futures Dealing Desk at 6438 1412

Fund deposit and withdrawal

We accept these major currencies as deposit:

 

1. US Dollar
2. British Pound
3. Swiss Franc
4. Singapore Dollar
5. Japanese Yen
6. Australian Dollar
7. Euro

Please check with us for any other currency that you may wish to deposit with OCBC Securities.

You may choose to deposit or withdraw funds by cash, cheque or Telegraphic Transfer (TT). It is good practice that you inform our dealers or marketing personnel of any fund transfer to your trading account so that we can monitor the receipt of your funds.

For Fund withdrawal, you would need to furnish your written request with your signature and fax to (65)6534 0009 by 12 noon for same day withdrawal.  You may obtain the prescribed withdrawal form from our Customer Service department.  If you wish to make arrangement for email request for fund withdrawal, please obtain the “Email Fund withdrawal instruction” Form from our customer service officers and indicate your designated email address and bank details in the form.

Acceptable collateral

We accept collateral in the form of Bankers Guarantee and selected Singapore Shares (subject to approval by the company) for initial and maintenance margin purpose only.  It cannot be used to cover cash deficit.  Accordingly, customer has to bring in cash to cover the cash deficit.  If the cash deficit is not satisfied, OCBC Securities reserves the right to exercise our rights under the collateral at any point in time to fulfill the cash deficit (even if the total equity is positive when supported by the value of the collateral).

Currency conversion

(a) Deficit Balances

We do not auto-convert your deficit currency in your trading account.  To do a conversion with your other available funds in the trading account, you would need to call our dealers by Singapore time, 5pm to obtain a quote of the conversion rate and if rate is acceptable to you, you may then request OCBC Securities  to proceed with the conversion. 

Nevertheless, we reserve the right, without prior notification to you, to convert any of the funds to the relevant currency for the purpose of offsetting any deficit equity balance in your account.

 

(b) Capital / Exchange control currencies

You need to consider the Capital control on the currencies as imposed by certain countries (eg. Malaysia, Thailand, Korea, Indonesia etc) before you trade in these markets.  OCBC Securities reserves the right to convert any of your funds in USD (or any other currencies) to the relevant currency and vice versa for the purpose of off-setting the relevant currency deficit equity balance, any realised losses and for meeting the margin requirements. 

 

Administrative charges

There is no administrative charge when you deposit fund to your trading account in cash or  cheques. Telegraphic Transfer (TT) of fund is subject to charges by the correspondence bank.

 TT (Inward Remittance) :
US$10.00 per transaction as levied by correspondence bank

 

TT (Withdrawal of Funds) :
minimum of US$40.00 per transaction or whichever is higher as levied by the correspondence banks

OCBC Securities generally does not facilitate third party remittance. Should any third party remittance be undertaken, you have to provide the original instruction letter to us.  Please note that a minimum charge of US$120.00 would be imposed.
 
Cost of delivery per contract = US$120.00 plus any other Exchange/bank charges.

Interest rates

Previous month interests are credited / debited into your trading account within the first 3 business day of the following month.

 

Interest on Surplus funds:
Interest will be paid to you for fund in excess of margin requirements provided they are more than US$10,000 on USD deposits, S$50,000 on SGD deposits or US$20,000 equivalent on other currencies.

 

Interest Rate:  Prevailing call deposit interest rate less 2.0% for such currency or any other currency which OCBC Securities may agree and deem fit.

Interest charge on deficit funds / currencies:
Debit balances in Client’s accounts shall carry interest at 2.0% above prime lending rate.
The interest charge also applies to any funding of Initial Margin against your collateral.

 

Other interest component under Futures Transactions:
Notwithstanding a positive equity balance in your account, there will be an interest charge on any shortfall in the relevant currency of the open contract’s initial margin.

Trading Rules, Limitations, & Risks of Internet Trading

Electronic trading systems are one of the trading avenues we offer to our valued clients. While we strive to make your trading as rewarding as possible, we would also like to take this opportunity to provide you with some information and guidance that are associated with E-trading. One important aspect to be aware of is certain trading practices that would possibly be deemed as offences under the Securities and Futures Act (“SFA” ) and Futures Trading Rules.

The relevant laws and rules are set out in Appendix 1 for your reference.

You will appreciate that in order to make best use of the trading system it is necessary to have a good understanding of the various features and functionalities available. The “Price and Quantity setting” feature, for example, protects you from erroneously executing trades through the setting of parameters in the trading system. Do refer to the user guide we have sent to you to help you better understand the system. If you need assistance, feel free to call our Helpdesk.
Electronic trading relies heavily on hardware and connectivity. Having a good understanding of the characteristics, limitations and risks associated with such mode of trading will enable you to better manage certain situations that may arise. You may refer to Appendix 2 or the section on electronic trading in our agreement.
You may wish to visit the various Exchanges’ website to familiarize yourself with the contracts specifications which offer crucial information pertaining to a contract, such as contract size, tick value and last trading day.


Appendix 1
Securities and Futures Act (“SFA” ) and Futures Trading Rules

SFA s206 : False trading No person shall create, or do anything that is intended or likely to create, a false or misleading appearance of active trading in any futures contract on a futures market or in connection with leveraged foreign exchange trading, or a false or misleading appearance with respect to the market for, or the price of futures contracts on a futures market or foreign exchange in connection with leveraged foreign exchange trading.

SFA s208 : Manipulation of price of futures contract and cornering No person shall, directly or indirectly — (a) manipulate or attempt to manipulate the price of a futures contract that may be dealt in on a futures market, or of any commodity which is the subject of such futures contract; or (b) corner, or attempt to corner, any commodity which is the subject of a futures contract.

SFA s209 : Fraudulently inducing persons to trade in futures contracts (1) No person shall —
(a) by making or publishing any statement, promise or forecast that he knows or ought reasonably to have known to be false, misleading or deceptive;
(b) by any dishonest concealment of material facts; (c) by the reckless making or publishing of any statement, promise or forecast that is false, misleading or deceptive; or (d) by recording or storing in, or by means of, any mechanical, electronic or other device information that he knows to be false or misleading in a material particular, induce or attempt to induce another person to trade in a futures contract or engage in leveraged foreign exchange trading.
(2) In any proceedings against a person for a contravention of subsection (1) constituted by recording or storing information as mentioned in subsection (1) (d), it is a defence if it is established that, at the time when the defendant so recorded or stored the information, he had no reasonable grounds for expecting that the information would be available to any other person.

SFA s210 : Employment of fraudulent or deceptive devices, etc. No person shall, directly or indirectly, in connection with any transaction involving trading in a futures contract or leveraged foreign exchange trading —
(a) employ any device, scheme or artifice to defraud; (b) engage in any act, practice or course of business which operates as a fraud or deception, or is likely to operate as a fraud or deception, upon any person; (c) make any false statement of a material fact; or
(d) omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.

SFA s211: Dissemination of information about illegal transactions No person shall circulate, disseminate, or authorise, or be concerned in the circulation or dissemination of, any statement or information to the effect that the price of a class of futures contracts or foreign exchange in connection with leveraged foreign exchange trading will, or is likely to, rise or fall or be maintained because of the market operations of one or more persons which, to his knowledge, are conducted in contravention of section 206, 207, 208, 209 or 210 if —
(a) the person, or a person associated with the person, has conducted such market operations; or (b) the person, or a person associated with the person, has received, or expects to receive, directly or indirectly, any consideration or benefit for circulating or disseminating, or authorising or being concerned in the circulation or dissemination, the statement or information.


SGX-DT Rule 3.4.1: Market Manipulation A Member, Approved Trader or Registered Representative shall not manipulate or attempt to manipulate the price of a contract or of any underlying, or corner, or attempt to corner, any underlying.

SGX-DT Rule 3.4.2: Churning A Member, Approved Trader or Registered Representative is prohibited from churning or generating commissions through creating excessive transactions in a Customer’s Account.

SGX-DT Rule: 3.4.3 False Trading, Bucketing, Fraudulent Inducement to Trade and Employment of Fraudulent Device A Member, Approved Trader or Registered Representative shall not:

(a) engage in, or knowingly act with any other Person in, any act or practice that will or is likely to create a false or misleading appearance of active trading in any contract or a false or misleading appearance with respect to the price of any contract;
(b) knowingly execute, or hold out as having executed, an order for the purchase or sale of a contract, without having effected a bona fide purchase or sale of the contract in accordance with this Rules;
(c) induce or attempt to induce another person to trade in a contract:

(i) by making or publishing any statement, promise or forecast that it knows or ought reasonably to know to be false, misleading or deceptive; (ii) by any dishonest concealment of material facts; (iii) by the reckless making or publishing of any statement, promise or forecast that is false, misleading or deceptive; or
(iv) by recording or storing in any mechanical, electronic or other device information that is knowingly false or materially misleading;
or

(d) directly or indirectly in connection with any trading in a contract:
(i) employ any device, scheme or artifice to defraud; (ii) engage in any act, practice or course of business which operates as a fraud or deception, or is likely to operate as a fraud or deception upon any Person; (iii) make any false statement of a material fact; or (iv) omit to state a material fact necessary in order to make any statements made, in the light of the circumstances under which they were made, not misleading.
In the course of your trading, do be mindful of the said prohibited trading practices as any person who contravenes any of the above provisions shall be guilty of an offence and shall be liable to a fine not exceeding $250,000 or to imprisonment not exceeding 7 years, or to both.


Appendix 2
Potential limitations and risks of on-line trading, which includes but not limited to the following:
(a) possibility of delays in order transmission and confirmation of order execution, and what to do in case of such delays;
(b) not being able to withdraw erroneous orders in time due to the speed of electronic trading; and
(c) danger of unauthorised access to a Customer’s on-line account and non-compliance of recommended preventive security measures in relation to matters such as the protection of passwords and leaving an on-line screen unattended.
(d) exposed to risks associated with systems including the failure of hardware and software, resulting in orders either not executed according to instructions or not executed at all.

Education Article 1: Understanding and Trading the US Dollar Index

What are USD/JPY, EUR/USD,AUD/USD…etc?

Trading spot forex can be a bewildering thing when you are trading certain currency pairs. You need to understand the economic undertone and the fundamentals of both currencies.  That is why most currency traders adopt a completely technical analysis approach to trading forex.

US Dollar (USD) is gaining prime light once again with the steady recovery of US economy. However with the numerous currency pairs available for USD, it is not easy for an investor to find the right currency pair.

What is the correct instrument to trade when:

  1. Your intention is only to trade the USD  
  2. You do not want to be bothered by the fundamentals of the opposing currency like Yen or Euro

The answer is the US Dollar Index.

US Dollar Index can be traded as a futures contract on the InterContinental Exchange (ICE). The index is a composite of the US Dollar versus 6 currencies; Euro, Japanese Yen,  Pound Sterling, Canadian Dollar, Swedish Krona and Swiss Franc.

It is a highly liquid contract and trades for 21 hours a day from 8:00 to 5:00 the next day GMT+8 (20:00 to 17:00 EST the next day) . The product is transparent as time-and-sales can be tracked in case of dispute. It is also available on the CFTC Commitment of Traders (COT) which means that you are able to know which side the big traders are on.

 The index is supposed to represent the US Dollar strength against its major trading partners. However, two other major currencies such as the Chinese Yuan and the Mexican Peso are not represented in the index.

Come to our Futures and Forex Trading Sense workshop to learn more on the US Dollar Index futures.

Education Article 2: Introduction to Commitments of Traders

Introduction to Commitment of Traders – Legacy Part 1

The futures markets in the United States are particularly well known for their transparency. Every market day, the daily volume and open interest of almost every contract are reported to the investing public.

In markets, trading volume dictates the strength and conviction of the investors. When the market is trending up and the volume continues to go up, the market is bullish. However when the uptrend is not supported by a rising trading volume, it may mean that the trend may be in for a correction or consolidation.

In futures markets, a volume of 1 lot means the matching of 1 buy and 1 sell to create that one lot. The other interesting feature of the futures market is the open interest.  What is the open interest? The open interest is the outstanding position of the investor left unmatched overnight. It can either be a long or a short. Hence if one investor is holding 1 lot of short overnight and another investor is holding 2 lots of long overnight, the open interest is 3.

Hence, a rising open interest in an uptrend market would indicate that the longs are bullish and continue to add new positions. Similarly, a rising open interest in a downtrend market would indicate that the shorts are bearish and continue to add new positions. For traders to hold their positions overnight may represent their conviction of their bullish or bearish views on the markets.

The Commitment of Traders Report (COT) provides a breakdown of open interest in futures and options markets by trader category. The COT report was originally created in 1923 when the U.S. Department of Agriculture’s Grain Futures Administration was established to administer the Grain Futures Act. As part of this program the large trader reporting system was implemented to monitor traders that exceeded pre-determined position limits. This was followed by the Administration’s first annual report in 1924 that included pertinent information on hedging and speculation in designated markets. Since then, the COT report is released on a weekly basis.

Prior to January 2007, there were only three categories of traders which are what this article is about. In Part 2, we will discuss the new categories. These legacy data are still available on the CFTC websites.

The three categories are:

Commercial traders use futures and options to hedge price risk associated with their business. For example, an airline company could be classified as a commercial trader as it uses aviation fuel for its aeroplanes and hedges its fuel need through the aviation oil futures and options.

 Non-Commercial traders include any trader that is not classified as a commercial trader, but holds positions above reportable levels. This category of trader is generally one that looks to have exposure in a particular commodity, but does not use futures and options to hedge against price exposure in the underlying commodity.

Non-reportable traders are participants that hold futures and options positions, but do not exceed the reportable limit in any commodity they are trading. This category, which could include commercial, non-commercial and index traders, is calculated by adding up the commercial, non-commercial and index categories and subtracting that total from the total open interest for each commodity.

Reportable position levels are set by Commodity Futures Trading Commission (CFTC) regulation and vary by product, ranging from 50 contracts to 500 contracts for agricultural products and natural resources. According to the CFTC’s website, these positions normally account for 70 to 90 per cent of the market, with the remaining positions being designated as non-reportable.

An example of a legacy report:





The above report shows that the non-commercial traders are net long (83,434-12,207) = 71,227 lots reflecting the current bullishness of the US Dollar (based on 24 March 2015). Also take note of the drop in open interest (-16,400) which reflected the recent top in the US dollar index.

Hence, when you trade the US futures and options, be mindful of this tool which can help you decide whether to go long or short. You can decide to follow the non-commercial who are the big speculators or go opposite the small speculators (nonreportable positions).If you use technical analysis and the COT is in line with your technical, the COT will help to give you a better support for your view of the markets’ directions

Disclaimer

Trading in Futures and Options can be very risky, and you may lose all or more than the amount invested or deposited. Where necessary, please seek advice from an independent financial adviser regarding the suitability of any trade or investment product taking into account your investment objectives, financial situation or particular needs before making a commitment to trade or purchase the investment product. You should consider carefully and exercise caution in making any trading decision whether or not you have received advice from any financial adviser.

Risk Warnings

Transactions in Futures and Options carry a high degree of risk. The amount of initial margin is small relative to the value of the Futures and Options transaction. As such, the transaction is highly 'leveraged or 'geared'. A relatively small market movement will have a proportionately larger impact on the funds you have deposited or will have to deposit; this can work in your favour or against you. You may sustain a total loss of the initial margin funds and any additional funds deposited with the firm to maintain your position. If the market moves against your position or margin levels are increased, you may be called upon to deposit substantial additional funds on short notice in order to maintain your position. If you fail to comply with a request for additional funds within the specified time, your position may be liquidated at a loss and you will be liable for any resulting deficit in your account.


 

References