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Investors Remain Bullish on Commodities - Friday, 20 May 2011

Trust Securities – The Case for Commodities Diversification

Dubai (May 16, 2011) – Investors remain bullish on commodities with more than half increasing their commodity allocation over the next 12 months, according to Trust Securities annual survey of institutional investors. The survey, which was conducted as the Japanese nuclear crisis and Middle East unrest unfolded, revealed that 85% of investors expect flows to be at or above last year’s levels and almost half are seeking returns of over 10%.

Asim Khan, Chief Executive Officer, Trust Securities - Dubai, said, “Investors expect to see continued strong demand from emerging markets and they predict another strong year for commodities. In addition, heightened geopolitical concerns, turmoil in the energy markets and rising inflation concerns will continue to cast commodity assets in a favourable light.”

Diversification continues…

The survey, shows that appetite for increased direct exposure to commodities is still high (75%). More than 60% of institutional investors are seeking active management strategies over the next 12 months.

Keith Martins, Head of Commodity Investment Sales at Trust Securities, said, “Commodities are now mainstream as an asset class with institutional investors being very knowledgeable. Not surprisingly, they now want to pick and choose between strategies to achieve their returns. This is why active strategies have become so popular.”

“The booming economies of China and India will continue to drive strong demand growth for most commodities over the next ten years. As a consequence, the price outlook for those commodities where physical supply is struggling to keep up like oil, coal and copper is very good. Geopolitics will also drive volatility in the energy markets and will be a key factor in driving returns in oil.

Last Updated on Sunday, 12 June 2011 11:01

Options Trading

Future Trading

Contract Specification

Trust Securities DMCC offers a standardised US Dollar denominated Option contract on Gold Futures.

An Option gives the right but not the obligation to the option holder to buy or sell an underlying asset at a specific price and time in the future. There are two basic types of Options contracts:

A call option is an option contract that gives the owner of the option, the right, but not the obligation, to buy the underlying asset on a specific date and at a specific price.
A put option is an option contract that gives the option owner the right, but not the obligation, to sell the underlying asset on a specific date and at a specific price.

Trading	DGO

Contract Size	One DGCX Gold Futures contract

Price Quotation	US Dollars and cents per fine ounce

Tick Size	US$ 0.10 per troy ounce

Maximum Daily Price Fluctuation	No Daily Limit

Delivery Months	The nearest three contract months (February, April, June, August, October and December) are available at all times The options are American-style and can be exercised at any time up to expiration. On the first day of trading for any options contract month, there will be a minimum of 7 strike prices each for puts and calls

Last Trading Day	Last trading day for gold futures options are the tenth business day prior to the start of tender period of the underlying Gold futures contract If the last trading day falls on a Friday or an Exchange holiday, last trading day occurs on the previous business day

New Contract Listing	Business day immediately following the last trading day

Exercise of Options	On the last trading day, all in-the-money options are exercised automatically against Settlement Price, however, should a member choose not to exercise an in-the-money option, the member is required to notify the Exchange latest by 23:45 hrs (15 minutes after trading ceases) All out-of-the-money options automatically expire worthless and they can not be exercised

Strike Prices	For each option contract, the strike prices are at increments of US$10.00

Position Limit	Initially, same as specified for Gold Futures contract

Margin Requirement	Buyer pays full premium, while the seller is margined on the SPAN basis

Trading Hours	08:30 - 23:30 Hours Dubai time (GMT+4)

Trading Days	Monday through to Friday

Option Settlement Premium

Value Weighted Average Price (VWAP) of trades executed in last 10 minutes for the trading day provided there were at least 15 trades executed during the last 10 minutes
VWAP of last 15 trades executed during the day provided 15 trades are executed
The Options Settlement Premium as declared by a Price Committee consisting of Exchange / Clearing Corporation officials

1.) For traded contracts, The Exchange shall determine the Option Settlement Premium based on following order:

2.) For contracts not traded on a given trading day, Options Settlement Premium will be determined based on theoretical prices

Last Updated on Wednesday, 25 April 2012 14:08

Discretionary Management

Online Execution	Trust Securities understand importance on the technical rules of trading Future and Options contracts, not all cliental posses this knowledge to achieve a risk-adjusted return on their investment. We provide a discretionary management account service, where our professional team of traders and risk managers explore trading opportunities using technical analysis, whilst incorporating discipline into the procedure. We deploy funds into liquid, cost-efficient and well developed asset class derivatives to achieve maximum profitability. Our global clients across the globe include, Asset Allocators, Institutions, Investment Funds and High Net worth Individuals and retail Individuals.
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Last Updated on Wednesday, 25 April 2012 14:18