Another Trading Instrument- FKLI

Kuala Lumpur Stock Exchange Composite Index Futures Contract (FKLI)

Stock Index futures contract is one of the most useful financial instruments in today’s global economy. Even though stock index futures contracts was introduced for trading as recently as 1982; futures trading and the concept behind these financial instruments have evolved over the last few centuries. With the commencement of trading in Kuala Lumpur Stock Exchange Composite Index (KLCI) futures contract (FKLI) on the Kuala Lumpur Options & Financial Futures Exchange (KLOFFE), the Malaysian capital markets have reached another plateau of maturity.

What is stock index futures contract?

Stock Index futures contract is an agreement between a seller and a buyer to respectively deliver and take delivery of a basket of shares which makes up the stock index, at predetermined price but at a specific future date. However, almost all Stock Index futures contracts (and similarly FKLI) provide for cash settlement in lieu of actual delivery of the basket of shares. The KLSE CI futures contract is a stock index futures contract that is based on the KLSE CI.

What are the FKLI contract specifications?

Contact code : FKLI


Underlying instrument : Kuala Lumpur Stock Exchange Composite Index (KLCI)


Contract size : KLSE CI futures mutiplied by RM50.00


Minimum price fluctuation : 0.5 index point valued at RM25.00


Daily price limits : 20% per trading session for the respective contract months except the spot month.


Contract months : Spot month, the next month and the next two calendar quarterly months. The calendar quarterly months are March, June September and December.


Trading hours : First trading session : 0845 hours to 1245 hoursSecond trading session : 1430 hours to 1715 hours (GMT + 8.00hrs)


Final trading day : Last business day of the contract month.


Final settlement : Cash settlement based on the final settlement value.


Final settlement value : The final settlement value shall be the average value, rounded to the nearest 0.5 of an index point (values of 0.25 or 0.75 and above being rounded upwards) of the KLSE CI for the last half hour of trading on the final trading day, excepting the highest and lowest values.


Margins : Initial margins are calculated risked based and determinded by MDCH using the Theoretical Inter-market Marginign Systems (TIMS). Variation margins are based on daily marked-to-market valuation.