Thailand Futures Exchange (TFEX) will launch Japanese Rubber Futures, a cash settled contract that is based on the price of Rubber Futures contract traded in Osaka Exchange (OSE), on November 30, 2020.
TFEX Managing Director Rinjai Chakornpipat said TFEX has collaborated with Osaka Exchange (OSE) in developing the new Japanese Rubber Futures (JRF), linked with Natural Ribbed Smoke Sheet No. 3 (RSS3) Futures contract traded in Osaka (previously called TOCOM rubber futures). JRF will be quoted in Japanese yen per kilogram but will be cash settled in Thai baht with the multiplier of 300. Compared to OSE’s rubber, JRF will have a smaller contract size, roughly around 1/5 of those of OSE. JRF will be traded continuously on TFEX from 9.15-16.55 hrs. with no lunch break.
As Thailand is the world’s top RSS3 exporter, there is a need in hedging rubber price movement, especially during the period of high volatility like this year. JRF is expected to serve as an alternative hedging and trading tools for market participants, especially those who are familiar with Japanese Rubber price. Local players will find it easy to trade as they can follow their familiar rubber prices but without foreign currency risk, added Rinjai.
