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KLCE Works on Implementing New Rules of Volatility Converting

KLCE.org plans to apply
a specially designed volatility converter vehicle for FX trading

Kuala Lumpur, Malaysia – (NewMediaWire) – October 7, 2022 – Kuala Lumpur Commodity Exchange (KLCE), a
pioneering commodity exchange that provides exhaustive and convenient access to
the Malaysian commodity markets, today announced that it investigates the
process of FX options volatility converting through a specific volatility
converting application. This service enables the pricing of the listed FX
options liquidity into over-the-counter (OTC) terms, thus helping FX traders
monitor and control more efficiently the prices and achieving expected trading
performance.

The volatility converting tool uses extensive
price data which is functionally equivalent to over-the-counter options
following adjustments in terms of style, time frames, and underlying price
matching, and elaborates a volatility system aimed at comparing the features.
The FX options volatility converter calculates and converts FX options
premiums, fixed data, standards, and formats into a volatility surface that
represents an OTC-equivalent system and into OTC quote conventions, thus
creating price comparisons around options pairs. The use of the volatility
converter ensures price transparency between OTC and the exchange’s options
markets due to the convergence of the value data.

Among other facilities that are provided
by the use of a volatility conversion tool, traders can identify transparency
gaining, receiving up-to-date information that empowers efficiency in decision
making. Traders can evaluate OTC-equivalent pricing and monitor the underlying
contracts and act on the optimal trade being able to evaluate price
relationships.

“Traders can promptly act upon a
market opportunity through data drilling that renders the code of the product,
the reference premium price, volatility, and value data which altogether helps
to identify a certain trading opportunity. Portfolio managers can check several
relationship pricing sources and get implied volatility quotes. It is more
efficient to have a prompt reference price in OTC-equivalent terms instead of
trying to convert our premium quotes to volatilities and adjust all features in
order to compare with OTC prices”, said Kwok Yo, Senior Managing Director
and Global Head of Commodities and Options Products.

About Kuala Lumpur Commodity Exchange (KLCE)

KLCE.org is a pioneering commodity
exchange that provides exhaustive and convenient access to the Malaysian
commodity markets. The Exchange’s markets offer clients trading opportunities
across a diversified range of asset classes all combined with best-in-class post-trade
services. KLCE is the main liquidity and price discovery center for Malaysian
markets. KLCE hosts are trading in equities, bonds, derivatives, currencies, money
market instruments and commodities. The Exchange is also a leader in driving the
modernization of Malaysia’s financial markets infrastructure and promoting
Kuala Lumpur as an international financial center.

Media Contact

Brand: Kuala Lumpur Commodity Exchange (KLCE)

Contact: Media
team

Email: press@klce.org

Website: https://klce.org

SOURCE: Kuala
Lumpur Commodity Exchange (KLCE)

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