Bursa Malaysia ended the day with two new historical record highs. Open Interest (OI) for all products hit a new high of 251,994 contracts at the end of day on Thursday 25th July, whilst FCPO saw 201,209 contracts remained open at the end of the same day.
Bursa Malaysia Derivatives’ Chief Executive Officer, Mr Chong Kim Seng said, "The growing Open interest is a reflection of BMD’s growing strength. This positive development is indicative of an elevated confidence in our derivatives market as well as interest in hedging the cash exposure using futures instruments by institutions."
The OI for all products and FCPO contracts on BMD have been consistently rising over the past four years. All contracts saw a record high OI of 148,652 contracts in 2010, 187,580 in 2011, 214,065 in 2012 and now an increase of 18% to 251,994 in just seven months of 2013. Meanwhile, OI on FCPO registered a historical high of 91,035 contracts in 2010, 143,338 contracts in 2011, 173,649 contracts in 2012 and now a 16% increase to 201,209 OI in July 2013.
About Open Interest
Open interest reflects hedgers' collective position in the Futures Exchange, taken against their other exposures and positions in the physical markets and is critical to the success of a futures contract. The true economic value of a Futures Exchange lies with its use as a price risk hedging facility, which is reflected in the open interest of the Exchange, and in turn reflecting hedgers' confidence in such a facility. The higher the Open interest, the higher the hedgers' confidence in the facility.