Tiger Brokers New Zealand

Futures contracts are legally binding agreements between a buyer and seller to purchase or sell a specific commodity or asset at a predetermined price in the future. Buying or selling a futures contract means you agree to buy or sell a specific quantity of a commodity or financial instrument at a specified price, and the settlement time depends on the settlement date of the contract you are trading. Please note that Tiger currently does not support physical delivery, therefore physically deliverable contracts need to be closed before the first notice date or the last trading day (whichever comes first). Non-physical (or non deliverable) contracts may be closed before the last trading day or the system will settle them with cash.

Futures trading has many benefits. Firstly, it provides risk diversification, as futures offer a variety of commodities or assets such as gold, crude oil, stock indices, etc., enabling investors to diversify their investments. Secondly, futures trading is highly leveraged as you control the full notional value of the contract but pay only a proportion of the value as margin, thereby improving the efficiency of capital utilisation. Thirdly, futures allow investors to manage expectations by locking in future prices to hedge market fluctuations. Last but not least, future contracts can be bought (long) and sold (short). Thus, a contract's underlying asset's increasing price is favourable for traders who went long on such a contract, while the underlying's decreasing price favourable to traders with a short position. However, futures trading also carries significant risks. Market risks due to global economic conditions, policy changes, supply and demand dynamics, etc., may cause price fluctuations, which can lead to investment losses. Since leverage can amplify returns, it can also lead to losses in excess of one's original investment when the market trend is unfavourable.

Margin requirements vary depending on the specific futures contract you trade and the exchange on which that contract trades. Before you begin trading, you must check the margin requirements for each contract. You can see important information such as margin and expiration date in the contract details via the following paths:

Mobile & Desktop: 'Quotes - Futures' - select a contract - 'Contract Profile'

Each futures contract has a specific expiration date, thereafter it is no longer tradable. In general, a futures contract would last for a few months. To effectively monitor a certain type of contract, the "continuous futures" approach is adopted to populate for the "main contract" (the current most actively traded contract) historical trading data of "main contracts" in the past for the sake of "continuity" of analysis. The "continuous futures contract" in itself is not a contract, thus not tradable. When one claims to be trading a "continuous futures contract", they could be referring to their trading the most active contracts throughout. You will need to be aware of the impact of "expiration rollovers" if you decide to adopt such a trading approach.

• Cash Settlement Contracts: You may close your position on or before the last trading day, otherwise the system will settle them with cash.
• Physical Delivery Contracts: Tiger Trade does not support physical delivery, in this case, you need to close your position before the first notice day or the last trading day.

Generally, the transfer is instantaneous. Under special circumstances, it could take around one business day for approval.

There are many types of futures contracts that you can trade, including commodities, currencies, indices, and interest rate contracts. You can view specific contracts supported in 'Quotes - Futures'.

Contango and backwardation are terms to describe the relationship between futures prices and spot prices. If the futures price is higher than the spot price, we say the future is in contango; if the futures price is lower than the spot price, we say the future is in backwardation.

• Contango: This refers to the situation where the futures price is higher than the spot price, also known as "positive basis". Contango may be caused by various factors, such as the expectation of future supply and demand relations pushing spot prices, or holding costs (such as storage, insurance, and interest) added to the spot price.
• Backwardation: This refers to the situation where the futures price is lower than the spot price, also known as "negative basis". Backwardation usually occurs when the market has a lower expectation of future spot prices, or when a futures contract is nearing delivery.

Please note, the state of contango or backwardation does not presage market trends but reflects the market participants' expectations of future prices.

Currently, Tiger Trade does not support futures trading on weekends as futures exchanges (like stock exchanges) are closed during the weekends. Please check the trading hours of the contract you wish to trade.

You can see your futures positions in Tiger Trade - Positions - Futures.

There may be many reasons why you can't trade certain futures contracts, including but not limited to your account type, account balance, contract margin requirements, exchange regulations, or that some contracts are not tradable on the Tiger Trade. If you have any questions, please contact our Client Services Team.

Futures trading is inherently a margin trading system, and therefore no additional financing or leverage can be used.
Futures contracts are traded on margin. Users only need an initial margin that is a certain percentage of the contract value (usually around 10%, but the margin ratio can be up to 50%) to trade. The exchange settles the users' position contracts once a day. Users whose margin amounts do not meet the requirements are required to provide additional margin. Tiger may require a higher margin for overnight contracts.

Futures trading involves high risks, and may not be suitable for all investors. This is not financial advice and should not be regarded as a solicitation or recommendation of acquiring or disposing of financial products. Any content being discussed, shared, and commented does not consider your own investment objectives or financial needs. Please read our Disclosure Statements and Terms and Conditions available on our website, and consider whether acquiring or continuing to hold financial products is suitable for you before opening an account or making investment decisions. Past performance is no guarantee of future results. Graphics and charts are for illustrative purposes only. You can also familiarize yourself with the trading rules through Tiger Trade's futures demo account.

Fees will be charged for both opening and closing futures contracts. Trading fees include Tiger commissions, platform fees, exchange fees, and regulatory fees. For details, please refer to the Pricing page. Please note that this page only displays the standard fees for one single transaction.