Recently, relevant person in charge of the Shanghai Futures Exchange learned that in order to improve the trading pattern of metal futures, and to better form a linkage with the international market, and at the same time to effectively control market risks, the exchange is in the process of opening copper and aluminum and other varieties in the evening. The electronic disk transaction conducted a sample survey on member units.
It is understood that the sample survey conducted by the Exchange is aimed at futures companies with large demand in the night session and not for all members. According to a source informed by a futures company who had received a sample survey from the previous period, the exchange had two research programs. One was to extend the trading hours of the evening opening to 1 a.m. at the end of the daytime domestic transaction. Another solution It is 24 hours continuous trading.
Electronic trading rules are not yet clear
“London copper LME market trading within 12 hours 45 minutes, the opening of copper and aluminum night domestic electronic disk extended to 1:30 in the morning, that is extended to the end of the closing copper copper market, can fully reflect the price changes of London copper "The silver futures analyst Zhang Dajiang said.
Domestic copper prices have always maintained a high positive correlation with the international market. After the domestic market closes, the United Kingdom and the United States markets have opened one after another. If major events occur at night or metal prices fluctuate greatly in the international market, there will often be gaps in the opening of the domestic metal futures market the next day, and investors will often have no time to stop.
Jing Jianwei, deputy general manager of Jingyi Futures, told reporters that if there is a night session, domestic investors can also make corresponding adjustments such as liquidation.
However, at present, the sampling survey for some members of the Exchange mainly focuses on the solicitation of trading hours, while no detailed details are provided for the electronic night plates of copper and aluminum and other varieties in the future.
In the LME market in London, there is a clear distinction between on-site manual outcry trading and off-exchange electronic trading. Over-the-counter transactions are conducted through the LME electronic trading platform for 24 hours. Most of the over-the-counter transactions take place in the market maker system. There is no market in China yet. Business system. In addition, LME off-the-counter electronic trading at the expiration of the contract only allows investors to settle in cash and has no physical delivery.
At present, domestic electronic transactions are exchanged by the exchange's computer trading system. Simple market maker bids are prone to price discontinuities. In the future, the exchange will launch a night-time copper-aluminum electronic trading, whether to distinguish between on-site trading and off-exchange transactions as in foreign countries. These issues have not been reflected and clearly distinguished in the research materials issued to futures companies.
"Now it seems that these boundaries are not clear, it is easy to understand as a continuation of day trading, if you continue trading at night, it is undoubtedly an additional increase in the workload of futures companies." The above futures company sources said.
Copper City Funds Lost
As the second largest copper trading center in the world, the “Shanghai price†formed by the Shanghai Futures Exchange has been of concern to international organizations. It is reported that the night trading of electronic products such as copper and aluminum products under investigation and planning is also an important part of the Exchange's commitment to innovation in systems, products and technology.
It is worth noting that at present, international funds have evacuated from the metal market, and it is an indisputable fact that domestic copper trading volume is reduced. In the future, the extent to which domestic copper/aluminium nightboards will be able to launch active trading volumes will not be known.
"Shanghai Copper's relatively high open interest once reached 200,000 hands, and it is now only about 70,000 hands. The copper market has lost at least 60% of its capital," said Zhang Dajiang, a silver futures banker.
Zhang Dajiang pointed out that the current shrinking volume of copper is mainly due to a phase change in the fundamentals. In less than a month, the copper inventory has increased to about 150,000 tons, and the spot premium has turned into a premium (ie, the spot price is low. At the forward price, domestic copper imports are also decreasing.
“Our company's retailers are now basically 'killed' almost, and the rest are funded large funds with foreign backgrounds. However, these large funds have been withdrawn recently, and the large rooms are empty.†The above futures company news People reluctantly said.
Extending the transaction is not as good as reducing the fee
To reverse the shrinking trading volume in the copper market, industry insiders believe that increasing the night electronic trading of metal futures is only one of the countermeasures, which is conducive to realizing convergence between the domestic market and the international market, allowing domestic investors to understand price fluctuations in the international market and prevent market risks.
“After all the investors who do preserve value are limited, if you extend the time, you can only spread the limited hedge positions to various time periods. With high transaction fees, the speculative trading is also inhibited, and transactions may not increase significantly with the launch of night market transactions. Therefore, simply extending the transaction time may be as simple as reducing commissions, subdividing contract units, and introducing copper and aluminum options.Especially important, copper and aluminum options are more effective and cost-effective to withstand overnight price gaps. One of the low financial instruments." The source of the above-mentioned futures company said.
“The copper fee is high,†complained one private equity fund manager. “Market efficiency has been reduced by the fee.â€
If market participants’ participation costs are too high, it is difficult to cultivate short-term masters. In foreign countries, short-term transactions account for more than 80% of the total transaction volume, and the handling fee is very low, and investors can quickly leave the cost zone. "If the transaction costs are high, there will be a lack of liquidity, leading to two outcomes, either a low volume of transactions or a large operator," the private equity person complained.
Wang Jianwei, deputy general manager of Jingyi Futures, said that the handling fees for sugar and rubber are relatively low, and most of the trading volume on the market is now made by short-term speculators. Too high is bound to shrink. Although the current market volume has shrunk, price fluctuations have not decreased. If the fees are lowered, it will still be attractive to investors. “This stage is now a good time to reduce copper fees.â€
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