USD/CNH Futures Contract Introduction

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US dollar against offshore RMB Futures Contract

 

1.   Why did APEX launch the USD-CNH Futures Contract?

With the acceleration of the internationalization of the Renminbi (RMB), the international status of the RMB has been on the rise. The RMB is widely used in global trade and investment, and increasingly becoming one of the important international reserve currencies.

The pace of reform of the RMB exchange rate regime is gaining momentum at the same time with greater international trade flows, resulting in trends of higher volatility and increased fluctuation in both directions of the exchange rate.

 

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Source: Wind Financial

Note: USD/CNH exchange rate for the past two years


2.   Why trade APEX UC Contract?

a)    Weekly contract formation: flexible for different investment and hedging time horizon
As the world’s first weekly USD/CNH contract, the UC Contract will list “four nearest weekly contracts + next three monthly contracts + next three quarterly contracts”, on a rolling basis, meeting the needs of clients with different investment and hedging time horizons.


Example based on 2019 Contract series

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b)   Smaller Contract Size: customizable for different investment and hedging exposure

The UC Contract will be sized at US$10,000 per lot. The small contract size is expected to be more liquid than larger sized contracts and will be more customizable to fulfill the needs of clients’ with different hedging and investment requirements.

c)    Cash Settlement: convenient and economical
The contract’s final settlement price is based on the USD/CNH spot rate published by the Treasury Markets Association (TMA) on the last trading day (LTD). Cash settlement has the benefit of requiring low cash outlay at the expiry of the contract. Clients only need to settle the profit and loss, which is economical on capital and convenient.

 

Why is the Final Settlement Price based on TMA USD/CNH spot rate?


Treasury Markets Association (TMA)’s USD/CNH (Hong Kong) spot exchange rate is the authoritative benchmark for the offshore RMB spot rate and is the widely accepted benchmark for settlement by many major global exchanges.

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Note: Derivation of TMA spot exchange rate

 

3.   How to access APEX market information and data?

Access APEX market data through the following software vendors:
Esunny, Thomson Reuters, Bloomberg, WIND Financial Terminal, Webstock myTrader and Pobo5. For more information on how to access the market data, please visit APEX Investor Guide.


4.   How to trade the APEX UC Contract?

Trade APEX products including UC and Palm Olein contracts through our 6 clearing members: Phillip Futures, KGI Securities (Singapore), HGNH International Financial (Singapore), DA Financial Service (s), Straits Financial Services, UOB Kay Hian Private Limited. For more information, please check our list of Clearing Members. 


5.   Getting Started

APEX USD/CNH Futures Contract Specifications

Contract   Code

UC

Ticker   Symbols

A Contract is denoted as UCyymmW#, where   “yy”, “mm” and “W#” refer to the year, month and the ordinal week of that   month on which the Contract shall expire. For symbology purposes, the first   week of a month is the first week of that month with a Wednesday.

e.g. UC1901W3 refers   to a Contract that is to expire on the third week of January 2019.

Contract   Size

USD 10,000

Price   Quotation

CNH per USD

Minimum   Price Fluctuation

CNH 0.0001 (4 decimal places)

Tick   Value

CNH 1

Contract   Series

The Exchange shall list 4 Contracts which   shall expire in the next 4 near-term consecutive weeks, followed by another 3   Contracts which shall expire in the third week of each of the next 3   consecutive months, followed by another 3 Contracts which shall expire in the   third week of each of the next 3 quarterly months (March, June, September and   December).

Upon the expiration of a Contract, the   Exchange shall list a new Contract for trading by the beginning of the next   Trading Day.

Trading   Hours

Singapore time trading sessions:

Monday – Friday, including Singapore Public   Holidays (except New Year’s Day Public Holiday)

T Sessions

06:55am - 06:59am (Pre-opening session of Day   Session) 06:59am - 07:00am (Opening match session of Day Session) 07:00am -   18:00pm (Day Session/2nd Trading Session) T+1 Sessions

19:25pm - 19:29pm (Pre-opening session of   Night Session) 19:29pm - 19:30pm (Opening match session of Night Session)   19:30pm - 05:00am (Night Session/1st Trading Session) Trading of a Contract   shall cease at 11:00am on its Last Trading Day.

Last   Trading Day

The Last Trading Day of a Contract shall be the   Monday of that Contract Week if it is a Hong Kong Business Day, otherwise the   next Hong Kong Business Day. Notwithstanding the above, the Exchange reserves   the right to determine the Last Trading Day with notice.

Daily   Price Limits

Unless otherwise prescribed by the Exchange,   there shall be no daily price limits.

Daily   Settlement Price

The Daily Settlement Price of a given day   shall be the volume-weighted average of the traded prices of all transactions   occurred during the last 5 minutes of the given day's Day Session, or other   methodology as set forth by the Clearing House.

Final   Settlement Price

The Final Settlement Price shall be equal to   USD/CNY(HK) Spot Rate published by the Treasury Markets Association of Hong   Kong (TMA) at approximately 11:30am Hong Kong time on the Last Trading Day,   or other methodology as set forth by the Clearing House.

Settlement   Method

Cash settlement in CNH

Block   Trade

Minimum 200 lots

Initial   Margin

Based on SPAN®

Maximum   Order Size

500 lots

 

Disclaimer

 

Futures trading may have complex features and risks which can expose an investor to various factors, including the incurring of losses. Hence, futures trading may not be suitable for everyone. Futures are leveraged investments and, it is possible to lose more than the amount of money deposited for a futures position. Please consider carefully whether futures are an appropriate instrument for you. Investors should ensure that they fully understand the risks involved, or contact their broker to obtain further clarification.