BACHELOR IN BUSINESS ADMINISTRATOR (Hons) FINANCE

(BA242)

FIN645 FUTURES AND OPTIONS

INDIVIDUAL ASSIGNMENT 1
FUTURE TRADING PLAN

PREPARED BY : SALINA BINTI SAIDI

STUDENT NUMBER : 2017440046

PREPARED FOR : DR. MD. KHAIRU AMIN BIN ISMAIL

SUBMISSION DATE : 31 DECEMBER 2021

 TABLE OF CONTENTS

CONTENTS PAGE
ACKNOWLEDGEMENT I
DECLARATION FORM II
1.0 INTRODUCTION 1
 Types of Future Trade
 Trading Plan for Future Trading
 Strategies for Future Trading
2.0 TECHNICAL ANALYSIS 2-7
2.1 Technical Indicator
2.2 VOLUME (Explain + Chart)
2.3 MACD
2.4 STOCHASTIC RSI
2.5 RSI
2.6 MOVING AVERAGE
3.0 FUNDAMENTAL ANALYSIS 8-9
3.1 Fundamental Analysis i
3.2 Fundamental Analysis ii
4.0 EXPERT OPINION 10
5.0 CONCLUSION 11-20
6.0 REFERENCES 21
7.0 APPENDICES 22-23
ACKNOWLEDGEMENT

To begin, I'd want to thank the Almighty for blessing me and allowing us to complete the task
successfully.

We want to thank our lecturer, Dr. Md. Khairu Amin bin Ismail, for allowing us the opportunity to
do research and for providing us with valuable advise throughout the process. Her genuineness,
passion, and vision have left an indelible effect on us. Working and studying under her guidance
was a tremendous pleasure and honour.

I'd also want to express my gratitude to my classmates for their assistance and support with this
project. During the assignment preparation chat, they stayed attentive and patient. Without them,
we wouldn't be able to do it.

I
 FACULTY OF BUSINESS AND MANAGEMENT
FINAL ASSESSMENT/ TEST DECLARATION FORM

Student’s Name : SALINA BINTI SAIDI

Student’s ID : 2017440046 Student’s I/C No. : 890617-03-5076

Program Code : BA242 Part : Course Code : FIN 645

Course
Name
FUTURES AND OPTIONS
:

Assignment/ Due Submission

Project No. : 1 Date : 31/12/2021 Dte : 31/12/2021

Lecturer’s Name :
DR. MD. KHAIRU AMIN BIN ISMAIL

I hereby declare that the work in this final assessment/ test was carried out in accordance with the
regulations of Universiti Teknologi MARA.

I acknowledge that I have been supplied with the Academic Rules and Regulations for Universiti
Teknologi MARA’s Bachelor Degree students, regulating the conduct of my study and exams.

I hereby declare that this assignment/ project is written by me and:

i. is a result of my own work;
ii. has not been used for another assessment at another department/ university/ university college
in Malaysia or another country;
iii. does not refer to/quote works of others or own previous writings without stating it both in the text
and in the reference list;
iv. mentions explicitly all sources of information in the reference list; and
v. will go through similarity check (Turnitin).

I am aware that disciplinary action (which may include the deduction of marks in the final assessment/
test) will be taken against me if I am found to be an offender.

30/12/2021

Date Student’s Signature

/ SAT FBM Sep 2020

ii
1.0 INTRODUCTION

A futures contract is an agreement to buy or sell a particular quantity of an asset at a

predetermined price on a specified date in the future. Futures contracts for each commodity or
asset can be traded on an exchange because their terms are uniform. The price is the only thing
that changes. Futures contracts now reflect commodities and financial instruments like as oil,
corn, gold, major stock indices, and foreign currencies that you are familiar with and hear about
on a daily basis in the news. Futures trading takes place on federally regulated exchanges, which
act as both a marketplace and a clearinghouse for post-trade clearing. Each futures transaction
generates a new contract between the buyer and seller, and the number of contracts generated
is limitless. Each publicly traded company, on the other hand, has a finite number of shares of
stock available for trading.

In my endeavor, I will use two different sorts of futures traders. There are FCPO-Crude
Palm Oil Futures to begin with. From Proficiency, edible oil and fat industry participants, as well
as investment managers and financial organizations, use FCPO as a risk management tool to
limit market price fluctuations. FCPO provides a structured instrument for ordinary investors to
participate in the crude palm oil market. To maintain a positive opinion on crude palm oil price
movement, buy low and sell high, and vice versa to maintain a negative view.

Second, the FKLI-FTSE Bursa Malaysia KLCI offers futures trading. To expose market
participants to the underlying FBM KLCI components, FKLI uses a Ringgit Malaysia "MYR"
denominated FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) Futures Contract
supplied by Bursa Malaysia Derivatives "BMD." It is used by both institutional and individual
investors in their trading portfolios.

1
2.0 TECHNICAL ANALYSIS
2.1 TECHNICAL INDICATORS
Traders employ chart analysis to acquire insight into the generation and consumption
of assets, as well as market psychology. The interplay of these indicators is the core
of value investing. For example, trade volume may be used to anticipate the length of
a rate rise. In this situation, trading chances will be produced via the usage of
indicators. From this list, I'll discover seven new chart patterns that I can use to my
trading. It is conceivable that I will not need all of them. Rather than that, I may cherry-
pick a handful that I feel will aid me in making better financial choices.

Traders generally appraise an item using a range of technical indicators. With so many
measures accessible, investors must become competent at using them and picking
the ones that are most applicable to their aims. Traders may construct future selections
utilizing analytical methods, such as more discretionary kinds of data analysis, such
as technical indicator analysis. Technical indicators may be included into price
discovery systems owing to their statistical character.

2
2.2 VOLUME
I use technical analysis as a trading strategy to help me succeed. In my trading, I use
volume as an indicator. The number of shares of stock traded on a securities exchange
or bourse during a given time period is referred to as volume. Volume is a popular
metric that is usually represented by colored columns, with green indicating increased
volume and red indicating decreased volume. Because volume confirms trend
direction, it is essential to include it in a trading strategy.

3
2.3 Moving Average Convergence Divergence (MACD)
The Moving Average Convergence Divergence (MACD) indicator is a trend-following
momentum indicator that illustrates the connection between two moving averages of
prices. The MACD is determined as the difference between the 26- and 12-period
exponential moving averages (EMA) (EMA). The MACD indicator may be used to
identify the strength of a bullish or negative market trend.

This indicator's histogram illustrates the difference between the MACD and signal
lines. It is time to buy when the MACD line (blue) crosses and crosses over the signal
line (orange), as indicated in circle A below. This signifies that stock prices are on the
increase. When the MACD line crosses and goes below the signal line, as in circle B,
bearish momentum develops.

By applying the MACD Divergence method, the indicator that offers buying and selling
signals may also be applied to identify changes in impending trends. MACD
Divergence arises when the MACD line's highs and lows do not correlate to the stock
price's highs and lows. MACD Divergence is split into two types: bullish and bearish
divergence.

4
2.4 Stochastic (RSI)
A stochastic RSI may be identified by examining a construction. A score larger than
0.8 suggests that the market is overbought, while a value less than 0.2 indicates that
the market is oversold. On a scale of 0 to 100, anything over 80 indicates an
overbought position, while anything below 20 suggests an oversold one. Apart from
that, we're applying the Stochastic Relative Strength Index, which displays how volatile
the market is. By employing RSI data, the stochastic algorithm tells traders if the
current RSI value is overbought or oversold. As a consequence, the stochastic RSI is
decreasing. As a consequence, the market has achieved an overbought state. To
summarise, the factors that form a selling signal for a futures contract.

5
2.5 Relative Strength Index (RSI)
The relative strength index (RSI) is a momentum indicator that is used in technical
analysis to analyze if a firm is unduly overbought or excessively oversold. The RSI is
visually represented by a line graph that oscillates between two extremes and has a
range of 0 to 100. A RSI rating of 30 or lower shows that the market has been oversold
or is undervalued.

6
2.6 Moving Average (MA)
A moving average is often used to start price investigation in technical analysis. In
statistics, a moving average is a series of averages calculated from different subsets
of a larger data set. Using the moving average indicator helps smooth out the price
data. A single moving average or a chart with a different time range are options.
Gaining Fluency 13/20/50/200 day moving averages are common. The average
becomes more sensitive when measured over a shorter day span. The investor may
choose a variable-duration time period. It commonly utilizes a 13-day moving average
for short-term trading.

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3.0 FUNDAMENTAL ANALYSIS
3.1 FUNDAMENTAL ANALYSIS i
Title : Palm Oil prices to stay high as fertilizer costs limit output, says CPOPC
Source : The Star
Date : Sunday, 02 January 2022
News Contents
This News mentions that the CPOPC expects palm prices to remain high next year
owing to high fertilizer costs and labour constraints. Farmers may restrict fertilizer
consumption further next year, resulting in poorer yields in a sector already suffering
from inadequate inputs. Prices of nitrogen and phosphate have risen by 50%-80%
since mid-2021, according to CPOPC, while supply shortages may affect plantation
enterprises. So Indonesia and Malaysia may not be able to generate significant
production in 2022. Together, they produce 85% of the world's palm oil. Due to limited
supply, benchmark crude palm oil futures have risen 31% this year, reaching a record
high of 5,220 ringgit ($1,252.25) per tonne. Prices would likely stay in the optimistic
area of US$1,000 per tonne, CPOPC stated, with greater soybean oil production
dampening the surge in 2022. The council predicted that China's palm oil imports
would climb to 7.2 million tonnes in 2022/23 from 6.8 million tonnes in 2020/21.

8
3.2 FUNDAMENTAL ANALYSIS ii
Title : Palm Oil Posts Third annual gain
Source : The Star
Date : Saturday, 01 January 2022
News Contents
This news mentions that Palm oil prices doubled in three years, driven up by a chronic
manpower shortage in Malaysia's second-largest producer and limited global
vegetable oil supply. Planters in Malaysia are facing their worst-ever scarcity of
plantation labour after the epidemic shut down borders and the government halted
fresh foreign workforce recruiting. In October, prices hit a new high of RM5,071
(US$1,214). “The palm and edible oil markets are facing a supply crisis in 2020,” said
Sathia Varqa, owner of Palm Oil Analytics.

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4.0 EXPERT OPINION

10
5.0 CONCLUSION

TRADING PLAN CHART

Trading Plan 1
Position : Long
Date Entry : FCPO JAN 2022
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : I gain
of the profit because I draw
the support and resistance
line correctly.
Expert Opinion :-
Trading Plan 2
Position : Long
Date Entry : FCPO FEB 2022
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : I
have the profit because I
discipline on time when to
buy and sell it.
Expert Opinion :-
Trading Plan 3
Position : Long
Date Entry : FKLI DEC 2021
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : Gain
of profit in FKLI DEC 2021
because draw the support
and resistance line correctly
Expert Opinion :-

11
 TRADING PLAN CHART
Trading Plan 4
Position : Short
Date Entry : FCPO JAN 2022
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : I gain
of the profit because I draw
the support and resistance
line correctly.
Expert Opinion :-
Trading Plan 5
Position : Short
Date Entry : FCPO DEC 2021
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : I
have the profit because I
discipline on time when to
buy and sell it.
Expert Opinion :-
Trading Plan 6
Position : Short
Date Entry : FCPO FEB 2022
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : Gain
of profit in FCPO FEB 2022
because draw the support
and resistance line correctly
Expert Opinion :-

12
 TRADING PLAN CHART
Trading Plan 7
Position : Long
Date Entry : FKLI DEC 2021
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : I gain
of the profit because I draw
the support and resistance
line correctly.
Expert Opinion :-
Trading Plan 8
Position : Short
Date Entry : FCPO DEC 2021
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : I
have the profit because I
discipline on time when to
buy and sell it.
Expert Opinion :-
Trading Plan 9
Position : Long
Date Entry : FCPO DEC 2021
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : Gain
of profit in FCPO DEC 2021
because draw the support
and resistance line correctly
Expert Opinion :-

13
 TRADING PLAN CHART
Trading Plan 10
Position : Long
Date Entry : FKLI DEC 2021
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : I gain
of the profit because I draw
the support and resistance
line correctly.
Expert Opinion :-
Trading Plan 11
Position : Short
Date Entry : FCPO DEC 2021
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : I
have the profit because I
discipline on time when to
buy and sell it.
Expert Opinion :-
Trading Plan 12
Position : Short
Date Entry : FCPO JAN 2022
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : Gain
of profit in FCPO JAN 2022
because draw the support
and resistance line correctly
Expert Opinion :-

14
 TRADING PLAN CHART
Trading Plan 13
Position : Short
Date Entry : FCPO FEB 2022
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : I gain
of the profit because I draw
the support and resistance
line correctly.
Expert Opinion :-
Trading Plan 14
Position : Short
Date Entry : FKLI DEC 2021
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : I
have the profit because I
discipline on time when to
buy and sell it.
Expert Opinion :-
Trading Plan 15
Position : Short
Date Entry : FKLI JAN 2022
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : Gain
of profit in FKLI JAN 2022
because draw the support
and resistance line correctly
Expert Opinion :-

15
 TRADING PLAN CHART
Trading Plan 16
Position : Short
Date Entry : FKLI DEC 2021
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : I gain
of the profit because I draw
the support and resistance
line correctly.
Expert Opinion :-
Trading Plan 17
Position : Short
Date Entry : FKLI JAN 2022
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : I
have the profit because I
discipline on time when to
buy and sell it.
Expert Opinion :-
Trading Plan 18
Position : Short
Date Entry : FCPO DEC 2021
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : Gain
of profit in FCPO DEC 2021
because draw the support
and resistance line correctly
Expert Opinion :-

16
 TRADING PLAN CHART
Trading Plan 19
Position : Short
Date Entry : FCPO JAN 2022
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : I gain
of the profit because I draw
the support and resistance
line correctly.
Expert Opinion :-
Trading Plan 20
Position : Short
Date Entry : FCPO FEB 2022
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : I
have the profit because I
discipline on time when to
buy and sell it.
Expert Opinion :-
Trading Plan 21
Position : Long
Date Entry : FKLI DEC 2021
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : Gain
of profit in FKLI DEC 2021
because draw the support
and resistance line correctly
Expert Opinion :-

17
 TRADING PLAN CHART
Trading Plan 22
Position : Long
Date Entry : FKLI JAN 2022
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : I gain
of the profit because I draw
the support and resistance
line correctly.
Expert Opinion :-
Trading Plan 23
Position : Long
Date Entry : FCPO JAN 2022
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : I
have the profit because I
discipline on time when to
buy and sell it.
Expert Opinion :-
Trading Plan 24
Position : Long
Date Entry : FCPO FEB 2022
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : Gain
of profit in FCPO FEB 2022
because draw the support
and resistance line correctly
Expert Opinion :-

18
 TRADING PLAN CHART
Trading Plan 25
Position : Long
Date Entry : FKLI DEC 2021
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : I gain
of the profit because I draw
the support and resistance
line correctly.
Expert Opinion :-
Trading Plan 26
Position : Long
Date Entry : FKLI JAN 2022
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : I
have the profit because I
discipline on time when to
buy and sell it.
Expert Opinion :-
Trading Plan 27
Position : Long
Date Entry : FKLI MAC 2022
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : Gain
of profit in FKLI MAC 2022
because draw the support
and resistance line correctly
Expert Opinion :-

19
 TRADING PLAN CHART
Trading Plan 28
Position : Long
Date Entry : FCPO JAN 2022
Technical :
1. Time Frame : 1 Day
2. Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : I gain
of the profit because I draw
the support and resistance
line correctly.
Expert Opinion :-
Trading Plan 29
Position : Long
Date Entry : FCPO FEB 2022
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : I
have the profit because I
discipline on time when to
buy and sell it.
Expert Opinion :-
Trading Plan 30
Position : Long
Date Entry : FCPO MAC
2022
Technical :
1. Time Frame : 1 Day
2. Major Treat : bullish
3. Indicator : VOLUME,
Stochastic, MACD
Fundamental Analysis : Gain
of profit in FCPO MAC 2022
because draw the support
and resistance line correctly
Expert Opinion :-

20
6.0 REFERENCES
1. https://www.bursamarketplace.com/
2. https://www.tradingview.com/
3. https://www.thestar.com.my/business/business-news/2022/01/01/palm-oil-posts-third-
annual-gain
4. https://www.thestar.com.my/aseanplus/aseanplus-news/2022/01/02/palm-oil-prices-to-
stay-high-as-fertiliser-costs-limit-output-says-cpopc

21
7.0 APPENDICES

22
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