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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, October 08, 2022 – (SEAPRWire) – 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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