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NEW EXPERIENCEBest Global Commodities Exchange 2012 | Best Middle East FX Exchange 2012 | FOW 8th Fastest growing exchange
Ideal locationand
Trading hoursAcross
time-zone
Central ClearingHouse promoted
by the Government
of Dubai
Simple transaction
fee structure Cash Settled
contractwith an
option fordelivery
Trade DGCX Gold Futures
Emaar Business Park, Building No. 2, Level 1, PO Box 37736, Dubai, UAE
T. +971(04) 3611616F. +971(4) 3611617
[email protected]/dgcxcommunity
@DGCX
1 KG contractIdeal forPhysical,
Institutionaland Retail
Participants
For further information on DGCX, our products and how to access our markets, please contact us on the details below. Alternatively, please refer to the contract specifications for product related information. Delayed prices for all DGCX contracts are available on our website.
Dubai Gold & Commodites ExchangeTel: +971 (0)4 361 1616, Email: [email protected],Web: www.dgcx.ae, Twitter: www.twitter.com/dgcx
Reference herein to “DGCX” shall mean the Dubai Gold & Commodities Exchange DMCC. This publication is for information only and does not constitute an offer, solicitation or recommendation to acquire or dispose of any investment or to engage in any other transaction. Neither DGCX nor its affiliates, associates, representatives, directors or employees, shall be responsible for any loss or damage that may arise to any person due to any action taken on the basis of this publication. DGCX shall not be responsible for any errors or omissions contained in this publication. All information, descriptions, examples and calculations contained in this publication are for guidance purposes only and should not be treated as definitive. No part of this publication may be redistributed or reproduced without written permission from DGCX. Those wishing either to trade futures and options contracts on DGCX, or to offer and sell them to others should establish their regulatory position before doing so. DGCX is regulated by the Emirates Securities and Commodities Authority (ESCA). ESCA is a member of the International Organisation of Securities Commissions (IOSCO).
Further Information
Membership
• DGCX membership is open to corporations or partnerships• Members typically located in the UAE; can be located outside from some jurisdictions
DGCX offers the following types of membership:• Broker Membership - Broker Members can trade all DGCX contracts either on behalf of their clients or on a proprietary basis• Trade Membership - Trade Members can trade all DGCX contracts on a proprietary basis only.
• Introducing Broker Membership - An Introducing Broker can introduce clients to Broker Members to transact business on DGCX. The Introducing Broker is not permitted to handle client’s funds or securities and will not be held responsible for the activities of clients introduced by them.
• Clearing Membership - Broker and Trade Members can apply for membership of the Dubai Commodities Clearing Corporation (DCCC), which entitles them to clear DGCX transactions. Financial institutions, banks and other entities who wish to clear but not trade DGCX business can also apply for special clearing membership.
For further information on how to become a member; application forms, admission fees, minimum net current tangible asset requirements, minimum capital requirements and regulatory requirements, please refer to the ‘Membership’ section of our website.
DGCX Gold Futures Contract Specification
Trading Symbol DG
Contract Size 32 troy ounces. (1 kg)
Quality Specification 0.995 purity, as per Dubai Good Delivery Standard
Trading Months Feb, Apr, Jun, Aug, Oct and Dec
Last Trading Day Third last business day of the month preceding the Delivery Month
New Contract Listing Business day immediately following last trading day
Price Quote US$ and cents per troy ounce
Tick Size US$ 0.10 (US $ 3.2 per contract)
Price Movement Limit US$ 30 *
Max Order Size 200 contracts
Trading Days Monday through to Friday
Trading Hours 07:00 - 23:30 Hours Dubai time (GMT+4)
Wholesale Trades EFS, EFP, Block trade facilities available
Note 1*: If price breaches the daily price movement limit, trading in particular contract shall continue, with the new trading price range without any cooling period
Gold, like all traded assets, is subject to ups and downs. The fact that there is a raging debate on whether gold is a currency or a commodity makes it one of the most volatile and difficult assets to trade.
Central banks and the investment community treat gold as a currency since its price is closely correlated to fluctuations in the international financial market -. Gold prices are sensitive to changes in inflation, interest rates, economic data and the value of the US Dollar versus other international currencies.
Gold however has several characteristics of a commodity as well - - it does not yield interest, and its price is determined by mining costs and demand for jewelry and industries.
Since Dubai is one of the largest jewelry markets in the world, gold is a key raw material. The average production cycle for jewellery from pure gold bar extends from one to two months according to the guidelines of FIFO or LIFO, which makes the manufacturers and sellers of jewelry particularly susceptible to gold price volatility.
Gold Currency or Commodity?
Exchange traded futures provide gold traders with significant advantages over non-exchange-traded solutions developed by financial institutions. • No credit risk – counterparty is always the clearing corporation • Low or virtually no costs for unwinding a trade• Extended trading hours that allow traders greater access the liquidity pool (7.00 AM – 11.30 PM UAE Time) • Very narrow spreads (compared to OTC markets) • The exchange provides the same price for everybody and offers easy access to the liquidity pool
Where to Hedge? Exchange vs. OTC Markets
Gold Futures & Options Trading Example
An investor thinks that the gold price is going to increase from US $1,600/troy ounce level in the two months from August. At as result, he decides to buy an October gold futures contract at US $1,700/troy ounce. Assume that his prediction is accurate and gold prices increase to US $1,820/troy ounce; his profits would be US $120/troy ounce.
However, should his prediction be inaccurate and gold price drop to US $1,500/troy ounce, then his losses would be US $200/troy ounce.
Alternatively, the investor could have chosen to trade DGCX gold call options or DGCX gold put options, which provide protection against rising or falling price movements depending on whether you are the buyer or the seller of the options contract.
Cost• Tax Free: No implicit or hidden tax• NO Exchange Transactions Fee• Leverage: Approximately 32 times • Margin: No margin on concurrent opposite contracts in the first and
second months • Collateral: Gold proposed as collateral
Technology• Trading platform based on technology from Cinnober, one of the
world’s leading providers of advanced trading systems• Co-Location of servers • Direct Market Access using FIX protocol • NINE approved Independent Software Vendors (ISV) inclusive of FTIL,
RTS, Flextrade, ORC, Ffastfill, Omnesys, MT5, Patsystem, and SunGard
Time & Service• Award winning service model and relationship management• 16.5 hours of operations (7.00 AM to 11.30 AM)• 30 minutes before Indian market opening – 5 hours post India market
close
Dubai Gold and Commodities Exchange: Uniquely Poised
Price• Prices almost identical to COMEX• Bid offer spread 10 - 20 cents • Tick size 0.01 $ per troy ounce• Average Volume : 2 tonnes per trading day • Cash-settled contract with an option of delivery (matching intent).• FLEXIBLE membership structure with unique cost-effective
membership options such as trade member and trade lease member
Risk• Central Clearing House promoted by the Government of Dubai • No default since inception • Regulated by the Securities and Commodities Authority (SCA)• Majority stake held by the government• Ideal Mix of Physical , Institutional and Retail Participants • Clearing Banks – Standard Chartered , Bank of Baroda , HSBC , ENBD • No transfer of funds outside of UAE. • Participation by institutional and large market makers.
DGCX has deep expertise in creating hedging tools tailored to the needs of gold merchants in Dubai, one of the world’s largest gold markets In the year 2011, Dubai saw 1,196 tonnes of gold worth, $41 billion changing hands, - 29% of the global trade in gold. The growth of the gold market has brought a corresponding increase in the need to
Risk Solutions Honed in the World’s Biggest Gold Market
hedge gold prices.For over five years, DGCX’s products have supported Dubai gold merchants in boosting the profitability and sustainability of their business,
Volumes for DGCX gold futures contracts have grown steadily since inception and the contract remains the flagship product of the exchange.
The Dubai Gold & Commodities Exchange (DGCX) commenced trading in November 2005 as the Middle East’s first commodity derivatives exchange and has become today, the leading derivatives exchange in the region.
In 2002, the Government of Dubai set up a specific free zone for commodity trading companies called Dubai Multi Commodity Center (DMCC). One of the first initiatives of DMCC was Dubai Gold and Commodity Exchange (DGCX), a derivatives exchange that offers an easy, convenient, safe and cost-effective alternative for gold and other commodity houses to hedge their market risk. DGCX extended its tools and trading benefits not only to local players but also to international players subject to regulatory approvals in their jurisdictions..
Benefits specific to DGCX include:• Trading in a range of products from the precious metal, base metal, energy and currency sectors • Guaranteed settlement and reduced counterparty risk provided by Dubai Commodities Clearing Corporation (DCCC), a subsidiary 100% owned by
DGCX• The advantage of transacting and clearing business within the UAE and thus the local taxation and regulatory regimes• A simple fee structure - one fee for all participants. All participants also pay the same margin, whether commercial or non-commercial entities• An opening to both regional and international liquidity pools• Robust risk management and surveillance systems• Uninterrupted trading hours from 7:00am – 11:30pm (GMT +4, IST+1.5)• Regulated by the Securities & Commodities Authority (SCA)
Dubai Gold and Commodities Exchange: Uniquely Poised
For a very long time, traditional gold houses in Dubai did not hedge their gold. They believed that in the long run gold prices would always rise, given the fact that the global financial entropy would always be inflationary in nature and constantly increase prices . They also felt that as long as they had an inventory at a lower cost than the current price of gold, they would always make a profit. The turbulent financial environment in the last four years, the meteoritic rise of gold prices and the big crash of 2012 made the community more aware of the advantages of hedging using conventional tools such as exchange traded futures, options and OTC products like gold forwards.
The traditional dilemma to Hedge or not to Hedge ?
International trading activity in gold derivatives has also risen in recent years, with the Over-the-Counter (OTC) gold derivatives market reaching US $44 billion gross market value as at June 2010, compared with US $22.38 billion in 2002. (Source: Bank of International Settlements).
Regulated by the Securities and Commodities
Authority (SCA)
Award winning service model
16.5 hours of
operations
Gold, like all traded assets, is subject to ups and downs. The fact that there is a raging debate on whether gold is a currency or a commodity makes it one of the most volatile and difficult assets to trade.
Central banks and the investment community treat gold as a currency since its price is closely correlated to fluctuations in the international financial market -. Gold prices are sensitive to changes in inflation, interest rates, economic data and the value of the US Dollar versus other international currencies.
Gold however has several characteristics of a commodity as well - - it does not yield interest, and its price is determined by mining costs and demand for jewelry and industries.
Since Dubai is one of the largest jewelry markets in the world, gold is a key raw material. The average production cycle for jewellery from pure gold bar extends from one to two months according to the guidelines of FIFO or LIFO, which makes the manufacturers and sellers of jewelry particularly susceptible to gold price volatility.
Gold Currency or Commodity?
Exchange traded futures provide gold traders with significant advantages over non-exchange-traded solutions developed by financial institutions. • No credit risk – counterparty is always the clearing corporation • Low or virtually no costs for unwinding a trade• Extended trading hours that allow traders greater access the liquidity pool (7.00 AM – 11.30 PM UAE Time) • Very narrow spreads (compared to OTC markets) • The exchange provides the same price for everybody and offers easy access to the liquidity pool
Where to Hedge? Exchange vs. OTC Markets
Gold Futures & Options Trading Example
An investor thinks that the gold price is going to increase from US $1,600/troy ounce level in the two months from August. At as result, he decides to buy an October gold futures contract at US $1,700/troy ounce. Assume that his prediction is accurate and gold prices increase to US $1,820/troy ounce; his profits would be US $120/troy ounce.
However, should his prediction be inaccurate and gold price drop to US $1,500/troy ounce, then his losses would be US $200/troy ounce.
Alternatively, the investor could have chosen to trade DGCX gold call options or DGCX gold put options, which provide protection against rising or falling price movements depending on whether you are the buyer or the seller of the options contract.
Cost• Tax Free: No implicit or hidden tax• NO Exchange Transactions Fee• Leverage: Approximately 32 times • Margin: No margin on concurrent opposite contracts in the first and
second months • Collateral: Gold proposed as collateral
Technology• Trading platform based on technology from Cinnober, one of the
world’s leading providers of advanced trading systems• Co-Location of servers • Direct Market Access using FIX protocol • NINE approved Independent Software Vendors (ISV) inclusive of FTIL,
RTS, Flextrade, ORC, Ffastfill, Omnesys, MT5, Patsystem, and SunGard
Time & Service• Award winning service model and relationship management• 16.5 hours of operations (7.00 AM to 11.30 AM)• 30 minutes before Indian market opening – 5 hours post India market
close
Dubai Gold and Commodities Exchange: Uniquely Poised
Price• Prices almost identical to COMEX• Bid offer spread 10 - 20 cents • Tick size 0.01 $ per troy ounce• Average Volume : 2 tonnes per trading day • Cash-settled contract with an option of delivery (matching intent).• FLEXIBLE membership structure with unique cost-effective
membership options such as trade member and trade lease member
Risk• Central Clearing House promoted by the Government of Dubai • No default since inception • Regulated by the Securities and Commodities Authority (SCA)• Majority stake held by the government• Ideal Mix of Physical , Institutional and Retail Participants • Clearing Banks – Standard Chartered , Bank of Baroda , HSBC , ENBD • No transfer of funds outside of UAE. • Participation by institutional and large market makers.
DGCX has deep expertise in creating hedging tools tailored to the needs of gold merchants in Dubai, one of the world’s largest gold markets In the year 2011, Dubai saw 1,196 tonnes of gold worth, $41 billion changing hands, - 29% of the global trade in gold. The growth of the gold market has brought a corresponding increase in the need to
Risk Solutions Honed in the World’s Biggest Gold Market
hedge gold prices.For over five years, DGCX’s products have supported Dubai gold merchants in boosting the profitability and sustainability of their business,
Volumes for DGCX gold futures contracts have grown steadily since inception and the contract remains the flagship product of the exchange.
The Dubai Gold & Commodities Exchange (DGCX) commenced trading in November 2005 as the Middle East’s first commodity derivatives exchange and has become today, the leading derivatives exchange in the region.
In 2002, the Government of Dubai set up a specific free zone for commodity trading companies called Dubai Multi Commodity Center (DMCC). One of the first initiatives of DMCC was Dubai Gold and Commodity Exchange (DGCX), a derivatives exchange that offers an easy, convenient, safe and cost-effective alternative for gold and other commodity houses to hedge their market risk. DGCX extended its tools and trading benefits not only to local players but also to international players subject to regulatory approvals in their jurisdictions..
Benefits specific to DGCX include:• Trading in a range of products from the precious metal, base metal, energy and currency sectors • Guaranteed settlement and reduced counterparty risk provided by Dubai Commodities Clearing Corporation (DCCC), a subsidiary 100% owned by
DGCX• The advantage of transacting and clearing business within the UAE and thus the local taxation and regulatory regimes• A simple fee structure - one fee for all participants. All participants also pay the same margin, whether commercial or non-commercial entities• An opening to both regional and international liquidity pools• Robust risk management and surveillance systems• Uninterrupted trading hours from 7:00am – 11:30pm (GMT +4, IST+1.5)• Regulated by the Securities & Commodities Authority (SCA)
Dubai Gold and Commodities Exchange: Uniquely Poised
For a very long time, traditional gold houses in Dubai did not hedge their gold. They believed that in the long run gold prices would always rise, given the fact that the global financial entropy would always be inflationary in nature and constantly increase prices . They also felt that as long as they had an inventory at a lower cost than the current price of gold, they would always make a profit. The turbulent financial environment in the last four years, the meteoritic rise of gold prices and the big crash of 2012 made the community more aware of the advantages of hedging using conventional tools such as exchange traded futures, options and OTC products like gold forwards.
The traditional dilemma to Hedge or not to Hedge ?
International trading activity in gold derivatives has also risen in recent years, with the Over-the-Counter (OTC) gold derivatives market reaching US $44 billion gross market value as at June 2010, compared with US $22.38 billion in 2002. (Source: Bank of International Settlements).
Regulated by the Securities and Commodities
Authority (SCA)
Award winning service model
16.5 hours of
operations
NEW EXPERIENCEBest Global Commodities Exchange 2012 | Best Middle East FX Exchange 2012 | FOW 8th Fastest growing exchange
Ideal locationand
Trading hoursAcross
time-zone
Central ClearingHouse promoted
by the Government
of Dubai
Simple transaction
fee structure Cash Settled
contractwith an
option fordelivery
Trade DGCX Gold Futures
Emaar Business Park, Building No. 2, Level 1, PO Box 37736, Dubai, UAE
T. +971(04) 3611616F. +971(4) 3611617
[email protected]/dgcxcommunity
@DGCX
1 KG contractIdeal forPhysical,
Institutionaland Retail
Participants
For further information on DGCX, our products and how to access our markets, please contact us on the details below. Alternatively, please refer to the contract specifications for product related information. Delayed prices for all DGCX contracts are available on our website.
Dubai Gold & Commodites ExchangeTel: +971 (0)4 361 1616, Email: [email protected],Web: www.dgcx.ae, Twitter: www.twitter.com/dgcx
Reference herein to “DGCX” shall mean the Dubai Gold & Commodities Exchange DMCC. This publication is for information only and does not constitute an offer, solicitation or recommendation to acquire or dispose of any investment or to engage in any other transaction. Neither DGCX nor its affiliates, associates, representatives, directors or employees, shall be responsible for any loss or damage that may arise to any person due to any action taken on the basis of this publication. DGCX shall not be responsible for any errors or omissions contained in this publication. All information, descriptions, examples and calculations contained in this publication are for guidance purposes only and should not be treated as definitive. No part of this publication may be redistributed or reproduced without written permission from DGCX. Those wishing either to trade futures and options contracts on DGCX, or to offer and sell them to others should establish their regulatory position before doing so. DGCX is regulated by the Emirates Securities and Commodities Authority (ESCA). ESCA is a member of the International Organisation of Securities Commissions (IOSCO).
Further Information
Membership
• DGCX membership is open to corporations or partnerships• Members typically located in the UAE; can be located outside from some jurisdictions
DGCX offers the following types of membership:• Broker Membership - Broker Members can trade all DGCX contracts either on behalf of their clients or on a proprietary basis• Trade Membership - Trade Members can trade all DGCX contracts on a proprietary basis only.
• Introducing Broker Membership - An Introducing Broker can introduce clients to Broker Members to transact business on DGCX. The Introducing Broker is not permitted to handle client’s funds or securities and will not be held responsible for the activities of clients introduced by them.
• Clearing Membership - Broker and Trade Members can apply for membership of the Dubai Commodities Clearing Corporation (DCCC), which entitles them to clear DGCX transactions. Financial institutions, banks and other entities who wish to clear but not trade DGCX business can also apply for special clearing membership.
For further information on how to become a member; application forms, admission fees, minimum net current tangible asset requirements, minimum capital requirements and regulatory requirements, please refer to the ‘Membership’ section of our website.
DGCX Gold Futures Contract Specification
Trading Symbol DG
Contract Size 32 troy ounces. (1 kg)
Quality Specification 0.995 purity, as per Dubai Good Delivery Standard
Trading Months Feb, Apr, Jun, Aug, Oct and Dec
Last Trading Day Third last business day of the month preceding the Delivery Month
New Contract Listing Business day immediately following last trading day
Price Quote US$ and cents per troy ounce
Tick Size US$ 0.10 (US $ 3.2 per contract)
Price Movement Limit US$ 30 *
Max Order Size 200 contracts
Trading Days Monday through to Friday
Trading Hours 07:00 - 23:30 Hours Dubai time (GMT+4)
Wholesale Trades EFS, EFP, Block trade facilities available
Note 1*: If price breaches the daily price movement limit, trading in particular contract shall continue, with the new trading price range without any cooling period
