1. Futures contracts trading hours
According to the Exchange rules, the trading hours of each future products vary differently; please refer to the details in the Tiger Trade App. You may take Exchange announcement as confirmation.
2. Minimum futures contract trading unit
The trading unit of futures contract is different from trading stock. In futures trading, "Contract" is the trading unit, and the minimum trading unit of futures is a standard contract which is normally called one standard lot. The contract size of different futures contracts varies differently.
3. Futures price changes
The range of futures price change is considerably large. Some contracts have no intraday price change limit, investors are strongly advised to manage your own trading risk.
4. Futures trading methods
The futures contracts are traded in margin, investors can enter a futures contract after fulfilling the initial margin requirement which is a certain percentage of contract value (margin ratio less than 50%, usually about 10%). Exchange will conduct the settlement for investors’ position contracts in daily basis, and issue margin call to investors whose account cash collateral fails to meet the margin requirement requirements; futures merchant may require a higher overnight margin requirement.
5. Futures contract delivery mechanism
When the futures contract approaches to its delivery date, the contract will be delivered in a designated manner required by the Exchange, and the manner of delivery usually are physical delivery or cash delivery.
The cash delivery refers to a manner of delivery that, for the due and open position futures contract is delivered, the profit and loss is calculated based on its settlement price and settle the contract by paying cash.
While the physical delivery is such a manner of delivery that, for the futures contract is due, the buyer and the seller transfer the physical underlying of the futures contract according to the Exchange rule to settle the contract.
6. Futures trading market
(1) CME Group (Chicago Mercantile Exchange Group Inc.)
CME Group (Chicago Mercantile Exchange Group Inc.) owns four Exchange brands, i.e. CME (Chicago Mercantile Exchange), CBOT (Chicago Board of Trade), NYMEX (New York Mercantile Exchange), COMEX (New York Commodity Exchange), which are in Chicago and New York, and the varieties of futures contract cover hundreds of futures and option contract across seven categories, i.e. energy, precious metal, base metal, agricultural product, exchange rate and interest rate.
(2) SGX (Singapore Exchange Limited)
SGX (Singapore Exchange) is a major financial products trading center in the world. SGX provides world class trading products across foreign exchange futures, stock index futures, interest rate derivatives (futures, option, forward, interchange, etc.). Besides, due to the special geographic location of Singapore, A50, iron ore, and natural rubber contracts provided by SGX are very influential trading products in the world.
(3) HKEX (Hong Kong Exchanges and Clearing Limited)
HKEX (Hong Kong Exchanges and Clearing Limited) is one of the principal exchange groups in the world, and its Hong Kong Futures Exchange provides various futures and option contract trading, such as stock index futures, precious metal, foreign exchange rate, interest rate.
(4) CBOE (Chicago Board Options Exchange)
CBOE established the option trading marketplace and standardized contracts, revolutionarily changing the option trading activities. In addition to option trading, CBOE also provides futures trading, of which the most famous one is the volatility futures of S&P500 index.
7. Last trading day and first notice day of futures
The last trading day means the last trading day of the contract, and usually the settlement date is also the last trading day. Open futures positions held to the last trading day will be delivered. n order to avoid any delivery risk, Tiger Brokers does not offers physical delivery, and the contract herein may be liquidated three trading days prior to the last trading. Commodities that follows the cash delivery can be held until the closing of last trading day, and Exchange processes the delivery and settlement based on the settlement price and converts the position into cash.
The first notice day means: in the futures market, some financial or commodity futures are available for a physical delivery, after the first notice day, the futures seller is entitled to notice the buyer to conduct a physical delivery. In order to avoid the delivery risk, Tiger Brokers does not allow physical delivery. Open futures contract position held to the first notice day, may be forced liquidated three trading days prior to the date due.
FAQs on Futures Trading
- Is there any overnight charge?
Tiger Brokers does not charge for overnight futures position but may raise margin requirements at the end of the day to manage trading risk better.
- Is $3000 the minimum deposit requirement for Tiger Brokers trading account?
Account of Tiger Brokers is subject to no requirement for minimum deposit.
- Occurrence of forced liquidation
According to trading rules, Tiger Brokers can conduct forced liquidation without notifying clients in advance.
Occurrence of forced liquidation, including but not limited to the following:
(1) Account risk ratio > 100%,
Explanation: The risk ratio represents the current account risk level. The smaller it is, the safer the account position is.
For Securities segment：RR = MM/ELV, Overnight RR = Overnight MM/ELV
For Futures segment：RR = MM/NLV, Overnight RR = Overnight MM/NLV
(2) 3 trading days prior to Contract expiry date (first notice day or last trading day)
(3) Account risk ratio > 100% due to posting the debit interest and other fees at the beginning of the month;
(4) Other conditions caused by Exchange or regulatory authority regulations.
- What is futures Main and Continuous Contract?
Each futures contract has a set expiry date, after which the contract is not tradable. It is usually traded for a few months from start to end. In order to check the price movement of the Contract in a longer time range, the concept of " Main and Continuous Contract" is created. "main contract" refers to the Contract with the most active trading volume at present. "continuous" can be interpreted as "connecting" the market price of each most active trading contract together. The Main and Continuous contract is not tradable. Trading the Main and Continuous contract is actually trading the currently most active contract. If you are trading in a Main and Continuous contract, please be aware of the impact of contract expiry and rollover.
- Can the same contract be entered into both open long and short positions at the same time (locked position)?
Global futures do not support the same contract with both open long and short positions simultaneously.
- Can it trade 0.1 standard lot?
No, the minimum trading unit for Futures contract is one standard lot.
The trading unit of futures is different than that of stock. In futures trading, "Contract" is the trading unit, and the minimum trading unit of futures is a standard contract which is normally called one standard lot. The contract size of different futures contracts varies differently
- Can I use leverage?
Futures trading itself is margin trading and cannot be further financed by using leverage.
The futures contracts are traded in margin, investors can enter a futures contract after fulfilling the initial margin requirement which is a certain percentage of contract value (margin ratio less than 50%, usually about 10%). Exchange will conduct the settlement for investors’ position contracts in daily basis, and issue margin call to investors whose account cash collateral fails to meet the margin requirement requirements; futures merchant may require a higher overnight margin requirement.
- Are the trading hours of all futures products the same?
According to the Exchange rules, the trading hours of each future products vary differently; please refer to the details in the Tiger Trade App. You may take Exchange announcement as confirmation.
9. How are trading fees charged?