According to a report by IME international affairs and PR, Hamed Soltaninejad, IME CEO gave a brief record of Gold Coin Futures trade on IME, which lunched in 2008 with 3173 contracts in the first year valued at 61 billion IRR. This underlying asses gained popularity over a short period of time thanks to provision of need infrastructure in IME with 246,754 contracts traded in 2017 valued at 657,965 billion IRR. He added that since the beginning of the current year, IME has sold more than half a million gold coin futures contracts valued at 345,974 billion IRR.
Necessary Features of Underlying Assets in Futures Markets
With regards to futures market Soltaninejad said that to select a commodity as a fit underlying asset for futures market, it needs to be subject to such conditions as:
Fluctuation in its prices due to seasonal changes, environmental conditions, capital shortage for farmers and exporters, middlemen activities and foreign currency rate volatilities
Its price is to be discovered based on the fundamentals of supply and demand without interference of the government
It needs to exist in abundance in the market
It should be standardizable
As to Saffron he added that numerous market participants in its market and its reliable spot price reference are among the other factor that IME decided to launch futures contracts on it.
Growth in Trading Value of Spot Market and Certificate of Deposit for Saffron
Soltaninejad also mentioned physical trade of saffron on IME and said: saffron was listed in IME in 2010 with 12,000 grams of it sold in IME in 2016, which reached to 121,000 grams in 2017. IME has witnessed trade of more than 7 million grams of saffron so far in the current year with very good prospects of growth till the end of the year.
According to Soltaninejad IME launched certificates of deposit for saffron in 2016 with more than 1,260,000 grams of it traded in certificates of deposit within the previous year.
Moreover, Soltaninejad said that foreign trader can also trade saffron derivatives on IME from now on.
IME CEO explained that the type of saffron trade o IME as the underlying asset in its futures market is Super Negin with its contracts size being 100 grams. Order limitation will be 25 contracts.
Finally, he elaborated on the long way IME had paved before lunching real trade of futures contracts for saffron: long negotiation with main producing cities of saffron in Iran to get the view of farmers and also market participants. Holding numerous educational courses to introduce such contracts and their merits to farmers and also the trading procedure to market participant and publishing various analytical and educational articles and brochures on saffron which in the end resulted in its popularity and lunching its trades on the exchange.