The Shanghai Futures Exchange will introduce crude oil options and index futures to meet the growing demand for futures products and tools in China, bourse officials said on Tuesday.
The yuan-denominated crude oil futures were unveiled on March 26, 2018 at the Shanghai International Energy Exchange - the whollyowned subsidiary of Shanghai Futures Exchange. It was the first of its kind open to overseas investors.
Public data showed that over 87,000 accounts have been opened at the exchange to trade the crude oil futures by Sept 30. The daily transaction volume came in at 149,000 lots, with the daily transaction value exceeding 69.16 billion yuan ($9.75 billion). It can be rated as the world's third largest crude oil futures market based on its trading size, according to the Shanghai Futures Exchange.
Overseas clients contributed to 20 percent of the total trading volume and now account for 25 percent of the existing positions, according to the exchange.
Wang Xiao, crude oil research director at Guotai Junan Futures, said that the performance of the crude oil futures has exceeded market expectations over the past 18 months. Apart from the trading volume and the involvement of overseas investors, the crude oil futures at Shanghai have shown due independence in terms of reflecting the global market ups and downs, he said.
"The trading volume of the crude oil futures contracts at the Shanghai exchange is gradually rising and the market liquidity is adequate. Given that the global crude oil market is studying the opportunities in emerging markets, it can be expected that the trading volume in Shanghai will further expand," he said.
Wang also said that the crude oil futures traded at the Shanghai exchange has provided a fair trade market for Asia, even though it cannot yet replace Brent crude and US West Texas Intermediate. As its trading volume increases, the crude oil futures in Shanghai will grow into a price index which will become an important complement to the world crude oil price market, he said.
To accelerate the internationalization of the Chinese futures market, the Shanghai Futures Exchange will also explore the opening-up of the futures market via qualified foreign institutional investors and renminbi qualified foreign institutional investors. The internationalization of existing products such as nonferrous metal futures will be advanced via deepened cooperation with overseas exchanges. Futures contracts for liquefied natural gas, gasoline and diesel will also be introduced as scheduled, said the Shanghai Futures Exchange.
