SMX starts trading GBP-USD and EUR-USD cash-settled currency futures

Number of contracts on the exchange reaches 11 as trading volume and turnover surges.

Singapore Mercantile Exchange (SMX), the first trans-Asian multi-product commodity and currency derivatives exchange, will begin trading the GBP-USD and EUR-USD cash-settled currency futures from July 29, 2011. In recent weeks, trading volume and turnover has increased steadily on SMX, and the exchange witnessed a historic high trading volume of 9,659 lots on July 27, 2011 with the turnover crossing USD 350 million.

The trading unit for the new GBP-USD contract will be 62,500 GBP and the trading will be conducted in March, June, September and December contract months. At any given time there will be four contracts listed. Typically, the Last Trading Day for GBP-USD Futures Contracts shall be two business days prior to the third Wednesday of the maturing Contract Month. The contract will be traded Monday through Friday and the clearing and settlement will be done through the Singapore Mercantile Exchange Clearing Corporation (SMXCC).

The trading unit for the new EUR-USD Cash contract will be 25,000 Euros equivalent to the existing EUR-USD physically-settled contract, but it will be cash settled. The introduction of a cash-settled EUR-USD currency contract will provide more trading and hedging options for market participants, according to an SMX report.

V Hariharan, interim CEO of SMX, said: “The new contracts will further enhance the currency futures basket on SMX and we expect to attract local and regional traders to hedge their currency risks and benefit from price discovery during extended SMX trading hours across Asian, European and US time zones.”

The introduction of the GBP-USD and Euro-USD cash-settled contract takes the total number of contracts available on SMX to 11. SMX had earlier introduced the AUD-USD and USD-JPY futures from April 29, 2011. This was in addition to the cash-settled gold, silver and copper futures which commenced trading on SMX from April 15, 2011. SMX had gone live on August 31, 2010 with futures contracts for Singapore deliverable gold, physically-settled currency pair Euro-USD, WTI crude and Brent crude priced in Euros.

SMX trading sessions span Asian, European and US business hours, with central counterparty clearing performed by SMXCC. The SMX platform allows remote participation through its diverse network of members and ISVs. The Exchange also offers its own proprietary front-end solution for direct market access.

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