SHFE Gold
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SHFE gold futures trade on the Shanghai Futures Exchange (SHFE). They were approved by the China Securities Regulatory Commission on Sept. 11, 2007 and launched on Jan. 9, 2008[1].
Each SHFE gold futures contract represents 1 kilogram of deliverable grade gold, which is defined as domestic gold with fineness not less than 99.95 percent or overseas gold that is regarded by LBMA as good delivery, and its delivery date is set as the 16th to 20th day of the spot month[2]. SHFE gold futures contract also has a delivery restriction that makes individuals ineligible to make or take delivery.
Each SHFE gold futures contract is subject to a margin rate equivalent to 7 percent of contract value (e.g., 14329 yuan = 204.70 yuan [AU0812 last price on May 23, 2008] x 1000 [grams/contract] x 7 percent) as well as a trading fee equal or below 0.02 percent of transaction value / contract. At the current exchange rate of around 7 yuan / dollar, the margin requirement for one SHFE gold futures contract is around $2,000, almost twice as expensive as the maintenance margin requirement for CME/CBOT Mini-Gold futures[3].
On the first day of trading, Jan. 9, 2008, SHFE gold futures traded 121,468 contracts, but about two months later, volume has declined to 16,056 contracts on March 7.
China's commercial banks are currently banned from trading futures, but they are interested and expected to be allowed to trade SHFE gold futures sometimes soon, according to the China Banking Regulatory Commission[4].
| SHFE Gold futures | ||
|---|---|---|
| Exchange | Shanghai Futures Exchange | |
| Settlement | Physically delivered | |
| Trade Unit | 1 kilogram/lot | |
| Point Value | 10 yuan (RMB) | |
| Tick Value | 10 yuan (RMB) | |
| Contract Months | January to December | |
| Last Trading Day | The 15th day of the spot month (postponed if legal holidays) | |
| Note: This contract is electronic ONLY -- no open outcry | ||
| No Open Outcry | Electronic | |
| Trading Hours | N/A | 9:00 am to 11:30 am, 1:30 pm to 3:00 pm |
| Ticker Symbol | N/A | AU |
| Price Limits | N/A | Within range of 5% above or below the settlement price of the previous trading day |
References
- ↑ SHFE Opens Gold Trading On Jan Ninth. Shanghai Futures Exchange. Retrieved on January 2, 2008.
- ↑ Gold Contract Specification. Shanghai Futures Exchange. Retrieved on .
- ↑ CME Group, Inc. CME Group, Inc. Retrieved on May 23, 2008.
- ↑ Chinese banks allowed to trade gold futures. China Daily. Retrieved on May 25, 2008.
