SGX MSCI Singapore Index Futures & Options

Efficient Access to Singapore Equity Market Exposure through Benchmark-linked Derivatives

A highly liquid order book driven by natural supply and demand flow, with support of committed market makers for both Asian and US hours. Market makers are also able to respond to requests for quotes (RFQs) for block trading.

Key Benefits

• Synthetic Equity Position: Allows investors to quickly take advantage of both event-driven news and long-term economic trends of the broad stock market in a fast and cost-efficient way with a single transaction. 
• Cost-efficient and Leveraged Beta Exposure: Trading the MSCI Index Futures contract requires an initial margin deposit that represents only a small fraction of the value of the contract, thus freeing up more capital compared to stocks or ETFs. Similarly, the index option buyer benefits from the leverage effect as the premium paid relative to the contract value is small. Consequently, for small percentage moves of the underlying index, the index option holder can see large percentage gains for his position at a lower cost than if he owned the stock. Furthermore, risk is predetermined as the most the index option trader can lose is the premium paid to hold the options.
• Flexibility: Ability to employ a variety of trading strategies (portfolio hedging, directional positioning, index arbitrage). The availability of different contract months gives investors unprecedented flexibility in their trading as they can choose the contract month that best suits their investment horizon. Moreover, there are no restrictions for short-selling the MSCI Index futures contract to take advantage of a declining market.