Trading the KOSPI 200 Index Futures

[Soultrader]

Here is an introduction to the KOSPI 200 futures contract listed on the KRX. The KOSPI 200 consists of 200 stocks selected from issues traded on the KRX Stock Market.

The heavily weighted stocks for this index includes companies like Samsung Electronics (15.59%), The Pohan Iron and Steel Company (7.89%), Kookimin Bank (3.89%), HHI or Hyundai Heavy Industries (3.53%), etc...

Here is a snapshot of the contract specifications for the KOSPI 200.



At the current exchange rate, 1 tick would be equal to around $25. So basically one point would be equal to $50. (2 ticks per point)

Okay, so enough of the technicals. How does the KOSPI 200 trade? Well for US traders, your hours will begin at 7pm EST to around 1am EST. The above CQG contract spec shows open at 20:00 but this has not been adjusted for daylight savings time so the correct time would be 19:00 EST.

A couple of key things to note for this contract. This contract is heavily retail driven. Unlike the Nikkei which is dominated by instutions, the KOSPI is rather light in terms of bid/ask. The movements are similar to the ES and Russell combined. Reversal are common making it one of my favorite setups for this contract. Gaps are not as severe like the Nikkei allowing me to use market profile as my preferred tool to spot S&R levels.

VSA traders... this is a contract you might be interested. Tests, lower volume lower lows, etc... are very common patterns. Momentum players.... requires discpline but push through supply volume during a rangebound market or test of low is common.

[MidKnight]

I also hear that the options on the K200 are the highest volume of any market in the world....Thanks for the summary soultrader, I wasn't aware of the difference of market participants versus the Nik. I believe most USA folks can't trade this market due to CFTC regulation, unless that has changed recently.

With kind regards,
MK

[Soultrader]

	Quote:	MidKnight
	I also hear that the options on the K200 are the highest volume of any market in the world....Thanks for the summary soultrader, I wasn't aware of the difference of market participants versus the Nik. I believe most USA folks can't trade this market due to CFTC regulation, unless that has changed recently. With kind regards, MK

Yes that is correct... the options are the highest volume in the world. Dont really know too much who is trading them as most insitutions in Tokyo do not trade the Korean markets.

Btw.... what CFTC regulation prohibits USA traders from trading the KOSPI?

[MidKnight]

I'm not sure what the regulation is specifically...they just don't allow it. But don't worry, there is no such restriction to trade the Enron or the Worldcom Its all for the protection of the American people I think.

With kind regards,
MK

[Kiwi]

IB provide a list of products that Nanny has approved for the kiddies (no offense kids):

http://individuals.interactivebroker...?ib_entity=llc

[pipal]

Hello SoulTrader, MK and Kiwi, I have recently been reading lots of information about trading the Asian Indices, and got to know much from you guys in different forums including this one. I have been trading fx and now want to make better use of the Asian sessions trading the Asian indices. But first of all, I will study the markets and pattterns live via IB for a while, though I got some ideas from you guys that Nikkei225, Kospi200 and SPI200 look good to me. Many thanks and see when I will start trading live.

[brownsfan019]

Here's what my OEC contact said about the Kospi:

	Quote:
	Currently the KOSPI is still awaiting approval for US Traders to trade.

I do not know the specifics but apparently there are some back office things that need done before US traders can trade this.

[Kiwi]

pipal,

Don't forget the STW (Taiwan on Singapore Futures). It starts and hour later than Nk & SPI but its a nice mover with good depth that's about half the size of the other two.

James, do you have any analysis of market participants on STW? I've not seen one and would be curious to know who I'm trading with on STW.

[Soultrader]

	Quote:	Kiwi
	pipal, Don't forget the STW (Taiwan on Singapore Futures). It starts and hour later than Nk & SPI but its a nice mover with good depth that's about half the size of the other two. James, do you have any analysis of market participants on STW? I've not seen one and would be curious to know who I'm trading with on STW.

Unfortunately I do not. Never really looked at them before but now that you have triggered my interest, let me look into it and report anything I find.

[pipal]

	Quote:	Kiwi
	pipal, Don't forget the STW (Taiwan on Singapore Futures). It starts and hour later than Nk & SPI but its a nice mover with good depth that's about half the size of the other two. James, do you have any analysis of market participants on STW? I've not seen one and would be curious to know who I'm trading with on STW.

Oops I missed that one. I remember you are trading STW & SPI. I just subscribe these feed from IB, and they are all free except OSE. So I may just the SGX at this stage.

There are a few things I have to learn before I can start trading the indices. For the last couple of weeks, I learn about volume, t&s etc. these things are missing when I trade spot fx. Then I have to learn the markets live with a new platform. But anyway, you guys have already give some directions to start and helps a lot.