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Published on October 29, 2007

Kesara Manchusree, managing director of TFEX, said on Friday that today would be the first trading day of the SET50 Index Options, the second derivative financial product following the SET50 Index Futures which started trading in April 2006.

"Initially, we expect the combined trading volume of both futures and options next year will be 10,000 contracts," she said.

Kesara was confident that there won't be any problem today in trading options as TFEX had done three or four test runs of the system already. Thus, TFEX is confident that current facilities will be able to handle a large volume of options trading.

She said foreign investors were expected to pay attention to futures more than options as there were over-the-counter markets to support the product overseas. Foreign investors' trading now represents 20-25 per cent of total futures trading, while retail and institutional investors represent 50 per cent and 25 per cent, respectively.

The managing director of TFEX said investors who wish to invest in options must be well informed and educated about the derivative product. Several securities firms have educated their customers already.

"During the first five minutes of trading there will be a voucher worth Bt1,000 to offer to retail investors. We expect investors to trade for speculative purposes and this will encourage the market. Therefore, if the US stock market stays stable it would benefit options most," Kesara said.

Executives of the Stock Exchange of Thailand expect the next product of the TFEX to be stock options.

The TFEX has launched its "Futures Society" project offering information to investors who are interested in derivatives.

Siriporn Chanjindamanee

 The Nation