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SGE annoucement - indicates movement behind the scenes

OWoN: The Shanghai release indicates movement behind the scenes. Don't over react. It's NOT done yet, but getting there.




Notification on Market Risk Control during the National Holiday 2014


All Members,

The National Holiday 2014 is approaching. According to the holiday schedule issued by the Exchange, the market will be closed from October 1 to October 7. The last trading session before holiday will be the afternoon session on September 30 (Tuesday), and the first trading session after holiday will be the morning session on October 8 (Wednesday).

To mitigate market risk during the holiday, we decide to make adjustment to the margin rates and price limits of deferred products according to Measures for the Administration of Risk Control of the Shanghai Gold Exchange. Detailed adjustment is hereby given as below:


1. At clearing on September 29 2014 (Monday), margin rate for Au(T+D), Au(T+N1), Au(T+N2) and mAu(T+D) is adjusted from 8% to 10%, and price limit is adjusted from 6% to 8% since the next trading day. Margin Rate for Ag(T+D) is adjusted from 10% to 14%, and price limit is adjusted from 8% to 11% since the next trading day.

When a Limit-Locked Market occurs for a specific deferred product on September 29 2014 (Monday), margin rate and price limit for the product will be adjusted according to Measures for the Administration of Risk Control of the Shanghai Gold Exchange. The Exchange will adopt the margin rate and price limit of higher level for the product.

2. After trading resumes on October 8 (Wednesday), from the first trading day when a Limit-Locked Market does not occur, margin rate for Au(T+D), Au(T+N1), Au(T+N2) and mAu(T+D) is restored to 8%, and price limit is restored to 6% since the next trading day. Margin rate for Ag(T+D) is restored to 10%, and price limit is restored to 8% since the next trading day.


All members are required to properly conduct the risk control work, duly increase margin requirement based on customers’ position and risk profile, and remind customers of risk control, prudent operation and rational investment.

Shanghai Gold Exchange
September 23, 2014

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5 comments :

  1. I don't understand the significance of this.... numbers all going back to original after 8 day holiday.... anyone tell me what I am missing?

    ReplyDelete
    Replies
    1. Likewise, I stand confounded. Can someone elaborate?
      Thx

      Delete
    2. To mitigate market risk during the holiday, The prices are being adjusted only for the holiday period and will revert back to their respective before holiday numbers...Example:

      Margin Rate for Ag(T+D) is adjusted from 10% to 14%, and price limit is adjusted from 8% to 11% since the next trading day.

      So the rate for Ag(T+D) will revert back to 10% on Oct 8th, and the price limited will return to 8%. This is just to mitigate any market risks during the holidays...abundance of caution...risk controls to ensure a stable market.

      Delete
  2. CHINESE RENMINBI BECOMES DIRECTLY TRADABLE WITH THE EURO

    http://www.fourwinds10.net/siterun_data/business/currency/news.php?q=1412256662

    The Chinese central bank, People’s Bank of China, issued a press release announcing the authorization of direct trading between the renminbi and the euro on the inter-bank foreign exchange market.

    This is huge. The euro is the second most traded currency in the world, after the US dollar. The European Union is already China’s biggest trading partner and this is a major step in further increasing trade and investment ties with the EU as there is now a direct exchange rate between the two currencies, without the need to use the US dollar as the conduit.

    The renminbi is quickly marching down the path of internationalization as the Chinese currency is now directly exchangeable with the US dollar, Australian dollar, New Zealand dollar, Japanese yen, British pound, Russian ruble, and Malaysian ringgit.

    The use of renminbi in international trade settlement nearly tripled in value worldwide over the past two years according the The Society for Worldwide International Financial Telecommunications (SWIFT), and over one third of financial institutions around the world already use renminbi for payments to China and Hong Kong.

    This is another sign of how the system is changing. And it’s a major one.

    ReplyDelete

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