TABLE OF CONTENT

CONTENTS PAGE

ACKNOWLEDGEMENT 2

1.0 INTRODUCTION 3

2.0 LIST OF INSTRUMENT AND COMMODITIES

2.1 Crude Palm Oil Futures (FCPO) 4
2.2 FTSE Bursa Malaysia KLCI Futures 4

3.0 ROLES AND RESPONSIBILITIES OF GROUP MEMBERS 5

4.0 FACTORS THAT DETERMINE THE PRICE OF FINANCIAL INSTRUMENT

4.1 Fundamental Analysis 6
4.2 Technical Analysis 6

5.0 OVERALL TRADING PERFORMANCE 7

6.0 MOST PROFITABLE AND MOST UNPROFITABLE TRADE 8 - 12

7.0 STRENGTH AND WEAKNESS 13

8.0 STRATEGY FOR FUTURE TRADING GAME 14

9.0 CONCLUSION 15

10.0 REFERENCES 16
ACKNOWLEDGEMENT
In the name of Allah, the Most Gracious and the Most Merciful

All praises to Allah and His blessings for the completion of this report. I thank God for all
the opportunities, trials and strength that have been showered on us to finish this report. My
humblest gratitude to the holy Prophet Muhammad (Peace be upon him).

In performing our report, we had to take the support and guideline of some esteemed
people, who deserve our greatest appreciation. The success of this mission brings us much joy.
We would like to express our appreciation to Madam Syukriah Ali Course Instructor, University
Teknologi Mara (UiTM) for providing us with a strong assignment guideline during various
consultations.

We would also like to express our heartfelt appreciation to everyone who has helped us,
both directly and indirectly, with this report. We also thank the Universiti Teknologi Mara
(UiTM) for consent to include copyrighted pictures as a part of our paper.

Many people, especially our classmates and team members itself, have made valuable comment
suggestions on this report which gave us an inspiration to improve our report. We thank all the
people for their help directly and indirectly to complete our report.

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1.0 INTRODUCTION

Futures and options known as a classification of stock derivatives being traded in stock
market. Its have been listed by two parties in order to trade a stock asset on future date at fixed
price. To reduce market risks this contract will confined the price in advanced. Futures and
option will help trader to minimize future risk by predetermined prices. But sometimes, the
direction movement of price cannot be predicted because it can give a huge impacts on profit and
loss. Moreover, through an option the buyer have right whether to buy or sell on specific price
before closing date. While, a futures contract make a buyer to have a responsibility to purchase
certain assets, make a seller to sell that certain assets on specific future date except if its closed to
expiration.

During the trial game trading period starting on 1 st April 2021 until 16th April 2021, students
have been given 100 maximum trade with no brokerage fee. By obtaining a RM 100,000
students are allowed to trade a futures contract to gain profit. The list of trading asset that
provided are Crude Palm Oil (FCPO) which it’s a contract between a seller and buyer in order to
delivery respectively of Gold Futures (CPO). Next, Kuala Lumpur Composite Index Future
(KLCI) is a former name of Malaysian stock exchange that located in Kuala Lumpur was created
to allow the trading of Malaysian Securities. Trading in futures contract is much better than stock
is because its help to maximize the effectiveness of the underlying market because futures
contracts reduce unexpected price of buying an asset completely.

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2.0 LIST OF INSTRUMENTS AND COMMODITIES

2.1 FCPO

FCPO is a derivative contact between the buyer and the seller to take and make delivery
respectively of Crude Palm Oil (CPO) at a future date. It is an actually established contract,
which means that after the expiry of the contract, the buyer and seller would have to take and
make delivery respectively of the physical CPO. While for the delivery point, it can be made
at the option of the seller at registered Port Tank Installations (PTIs) which located at Port
Klang, Butterworth and Pasir Gudang. For the delivery period, it is from the 1st business day
until the 20th day of the spot or delivery month. The delivery period also can be change to on
the preceding business day if the 20th is a non-business day. However, the day of delivery of
the CPO is at the choice of the seller.

2.2 FKLI

FKLI is a Ringgit Malaysia (“MYR”) denominated FTSE Bursa Malaysia Kuala Lumpur
Composite Index (FBM KLCI) Futures contract traded on Bursa Malaysia Derivatives
providing the participants in the market exposure to the underlying FBM KLCI components.
It is actively used by both the institutional and retail investors in their respective trading
portfolios. The cash settlements for FKLI are in MYR. While for the contract size is FBM
KLCI multiplied by MYR50.

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3.0 ROLES AND RESPOSIBILITIES OF GROUP MEMBERS

During the futures trading activities, every member in the group had their own roles and
responsibilities to trade and survey how to choose the futures contracts. Besides that, the leader
always reminds each of the member to be aware with the last date to trade. On the other hand,
the other group members also keep on reminding each other to trade every day.

The group member would also remind each other to check on the daily profit or loss of
the futures in the Bursa Marketplace. This action is very important for the team to make a further
action whether to close out the futures contract or not where we close a contract that incurred
loss and hold the futures contract that gain profits. Besides, the members also would update on
their current trading activities so that the other members could correct and give suggestion
towards each other for a better trading result.

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4.0 FACTORS THAT DETERMINE THE PRICE OF FINANCIAL INSTRUMENT

4.1 Fundamental Analysis

A trading strategy need a strong method and plan in order to gain profit. By using a right
and perfect method in trading a future contract a trader most likely to be successful.
Fundamental is one of the most common method that all the trader apply that could influence
the price of contract in the futures. Fundamental analysis more focus on external events and
influences including financial statement and industry trends. It is have many kind of tools
and techniques to be applied. Which is a top-down analysis where trader look out on the
broader view of economy and bottom up analysis is on a specific stock enlarge to consider
all the factors that affect the price rise and fall. Our group members decided to focus on the
amount of company’s earnings report such a revenue. It helps us to gather the right
information to make our plan better about what to do.

4.2 Technical Analysis

Each of the group members also decided to apply technical analysis in trial games as a
starting point to implementing and understanding technical trading system toward our
strategy planning. This is because technical analysis helps to expect the future price
movements, with a full information that helps us to make profit. We apply this method tools
to a chart, so that we can clearly acknowledge the entry and exit points for certain potential
trades. More benefit situation on this technical analysis method is because the information
provided is came from the price chart itself. Indirectly, we able to gain profit in short period
of time.

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5.0 OVERALL TRADING PERFORMANCE
Return ROI (%) Trading
maximization =∑trading simulation activity
Student name Trading =∑trading profit/loss x 100 =∑trade done x 20
profit/loss profit/loss x 25 ∑deposit Max of no. Trades
∑deposit
Nur Raihanna Syafiqah RM 5,700 = 5,700 x 25 = 5,700 x 100 = 13 x 20
Binti Roslan 100,000 100,000 100
= 1.425 = 5.7% = 2.6
Nurul Balqis Binti -RM 925 = - 925 x 25 = - 925 x 100 = 4 x 20
Zakariah 100,000 100,000 100
= - 0.2313 = - 0.93% = 0.8
Nazatul Farahanim -RM 3,600 = - 3,600 x 25 = - 3,600 x 100 = 3 x 20
Binti Fakhrulrazi 100,000 100,000 100
= - 0.9 = - 3.6% = 0.6
Nurul Fasihah Binti -RM 1,975 = - 1,975 x 25 = - 1,975 x 100 = 3 x 20
Sapri 100,000 100,000 100
= - 0.4938 = - 1.98% = 0.6
Husna Izzati Binti -RM 1,375 = - 1,375 x 25 = - 1,375 x 100 = 27 x 20
Saridun 100,000 100,000 100
= - 0.3438 = - 1.38% = 5.4

Return on Investment (ROI) %

5.7
6
5
4
3
2
1
0
-1
-0.93
-2 -1.38
-1.98
-3
-4 -3.6
Husna

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6.0 MOST PROFITABLE AND UNPROFITABLE TRADE

NUR RAIHANNA SYAFIQAH BINTI ROSLAN

The most profitable trade that I made is June FCPO 2021. The position that I made is
long position on 2nd April 2021 with the price of RM 3,574 and it has a high volatility during the
trading period. I gained profit of RM 1,600 a day later and I manage to gain more profit everyday
since the FCPO price is always in uptrend. I also manage to gain the highest profit for several
days.

While the most unprofitable trade that I made are July FCPO 2021 and August FCPO
2021. This is because during few days before trading period ended, most of FCPO prices fell
drastically to RM 3,491 and RM 3,384 from RM 3,663 and RM 3,532. This has caused me a
great loss. I tried to trade more and hoping that the price will recover very soon but it turned out I
faced a greater loss. Hence, I closed my position to keep me from facing another losses.

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NURUL BALQIS BINTI ZAKARIAH

For the futures trading activity, I was unable to gain more profits as I only traded four
futures contracts which are FCPO June 2021, FCPO July 2021, and two futures contracts for
FKLI June 2021. The most profitable futures contract is FCPO June 2021, I buy the contract on
long position when the price was RM 3768.00 and rise later to RM 3800.00. Which I was able to
gain gross profits of RM 32.00 and able to cover up for my loss and reduce the loss that I gains.

While for the most unprofitable futures contract is FCPO July 2021 which I bought the
contract on short position when the price was RM 3572.00 then drop to RM 3450.00 and resulted
to gain gross loss at RM 409.00.

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NAZATUL FARAHANIM BINTI FAKHRULRAZI

One of the most profitable trades that I had FCPO 6 April 2021 where I get the profit RM
275.00. But I make a hasty decision to close the contract as soon I get the profit. I gain the
contract on that day because I manage by going long after forecast the price for FCPO future in
Bursa marketplace that it going uptrends. So, I make a decision to buy the FCPO market on that
day.

Second, I trade two in FCPO but in the different month and both of contract are loses.
The most unprofitable trades is in FCPO 15 November 2021 Where I loses over RM 2,525 on
that day. But I did not close yet because I totally sure the price is going to increase for next day.
Unfortunately, the price is fall more and more.

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NURUL FASIHAH BINTI SAPRI

From the futures trading activity, I was unable to gain much profits since I have only
traded a total of three futures which is FKLI September 2021, FCPO June 2021 and FCPO
August 2021. Out of three futures traded, the only futures that I am able to gain profits is FCPO
June 2021. I was able to gain a profit of RM 2,950 from the futures because I went for a long
position. The reason for choosing the long position for that particular futures is because the price
of FCPO futures is having an uptrend.

Besides, the most unprofitable of futures trade from my trading activities is FCPO August
2021. At first, I gain some profits from the futures but then the prices keep on falling. Since I was
expecting the price to increase in the future, I did not close out the futures. However, my
expectation went all wrong as the price keep on falling instead of rising. Therefore, l had
suffered an amount of RM 4,125 losses from this futures trading.

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HUSNA IZZATI BINTI SARIDUN

Throughout my trading session for almost 3 weeks, the trade that I have been done is 27
trading leading me on ranking 49. As I can conclude, one of the most profitable trade during my
trading session are FCPO in July, August and September 2021. Which I gain three thousand
ringgit during that times. Especially, during 14 until 16 of April FCPO chart percentage getting
higher time to time. Due to this uptrend of FCPO, I decided to hold the contract till the end of the
trial end day. Its help me to cover up my loss during my first week of trial games which almost
RM 20,000.

This is because I have made a mistake in trading on unprofitable contract which is FCPO
August. The mistake that I have been make is I did not observe on the price during the trade. I
have trade FCPO August when the price is ultimately downtrend which lead me to huge impact
of loss. I also take a short thinking by close the contract immediately. I should have hold the
contract until in rise again in future since I buy the long position one.

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7.0 STRENGTH AND WEAKNESS

Throughout the trading process, we had found our strength and weakness. There are a few
strengths of our group in which benefits us in the futures trading process. The first strength is
having a clear goal. Our group has a definite goal and mindset from the beginning until the end
of the trading activity which is to gain a huge profit. By having a clear goal, we had become
more prepared in terms of making plans to achieve the goals. These plans play a very important
role in order to avoid all the uncertainty that could happen in the market as we are all prepared
for the outcomes. The other strength of our group is we also make a study and research on the
futures market. It is very important to have a knowledge of the market before making any
transactions. Before participating in the trading, we did some research and study on the trends
and patterns of futures markets.

Our group were also able to identify some weaknesses in the futures trading activity. The
first weakness is making a rush decision. We found that we were always making a rush decision
by doing a transaction without thinking thoroughly. We still make a decision by purchasing
futures contract despite knowing the facts that the prospects of the investment do not match with
our research and study. We also make a rush decision by closing up our futures contract too early.
Therefore, we gain nothing from some of the transactions done. Besides, we are also having an
unrealistic expectation towards the market. Our group are giving a high expectation on the
market by making a transaction and expect that the trading activity will definitely going to gain
us a lot of profits.

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8.0 STRATEGY FOR FUTURE TRADING GAME

Futures are financial futures contracts that allow the buyer or seller to purchase or sell an
asset at a predetermined price and date in the future. The futures market was initially developed
to meet the needs of commercial traders. There are many types of strategy of future market that
we can followed. One of it is, the Pullback strategy. The pullback strategy is one of the strategies
that we followed in order to buy or sell the future contract. It is an effective futures trading
strategy that focuses on price that occurs in a trending market when a stock breaks above or
below a resistance level, reverses, and retests the broken level. During an uptrend, then reverses
and retests the level where the price is above a defined resistance level. When the price falls
below a well-established support level, then reverses and retests the level this is where the
downtrend occurs. This is a pullback, and we as the dealer will take a short position against the
underlying downtrend. So, we will take the opportunity to buy the future contract when the price
is low in order to gain profit.

Next strategy that can be use is ‘going long’. The going long is the strategy where we can
buy the future contract when the price of underlying commodity to increase over certain period
of time. Forecasting the price's course and timing change is accurate, sell the future contract later
with higher price when the price is expected to face loses. So, using this strategy, we will able to
gain a lot of profit buy buying the future contract when the price is expected to high and sell the
contract when it loses. Buyer and seller interest also one of the good strategies that can be
followed. Meaning that the interest of the seller or buyer toward the contract will make them to
research about the futures that they are going to buy. The data of buyer and seller are utilized by
trader, the buyer and seller decision whether to sell or buy future contract. The Depth of Market
window, which displays the number of available buy and sell orders for a futures contract at
various price levels, determines buyer and seller interest. With this, we normally will always
monitor the Bursa Marketplace in order to see the graph of financial analyst of future market is
rises or fall. If low, we will make a decision to buy and rises will sell.

Lastly, the strategy of the future market is not closing the contract at loses to early. This is
because when we close the contract at a loss, the funds are deducted from the trader's account,
and their account balance decreases. When a contract is closed, the margin used for that trade is

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no longer used, and that margin is now available if the seller wishes to position another futures
order.

9.0 CONCLUSION

As a conclusion, FCPO is a derivative contract between a seller and a buyer that required
them to take and to make the delivery of Crude Palm Oil (CPO) respectively at a future date.
FKLI on the other hand is a Ringgit Malaysia (MYR) that denominated FTSE Bursa Malaysia
Derivatives Composite Index (FBM KLCI) futures contact which is traded on Bursa Market
Derivatives. In the futures trading activities, our group has traded on multiple FCPO and FKLI
futures in short position and long position. Although we traded on many futures, we are only able
to gain profits from a few futures. During the futures trading activities, we notice that each of our
group member had traded FCPO June 2021 the most and it turns out to be the most profitable
futures within our group. We also found that it is quite hard for us to gain profit since it is our
first time doing a futures trading. As for the next futures trading activities, we will make sure that
the strategy is well prepared and well organized so that all members could gain more profits and
reduce loss.

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10.0 REFERENCES

1. Bursa Market Place. Bursa Market Place. (2021). Retrieved 21 April 2021, from
https://www.bursamarketplace.com/index.php.

2. Konchar, P. (2021). 7 Best Futures Trading Strategies You Can Use (And 3 to Avoid!) -
My Trading Skills. My Trading Skills. Retrieved 21 April 2021, from
https://mytradingskills.com/futures-trading-strategies.

3. Futures and Options (F&O) - Definition and Types of Futures and Options. Groww.
(2021). Retrieved 21 April 2021, from https://groww.in/p/futures-and-
options/#:~:text=Futures%20and%20options%20are%20the,price%20on%20a%20later
%20date.&text=Futures%20and%20options%20basics%20provide,investment
%20through%20pre%2Ddetermined%20prices.

4. (2021). Retrieved 21 April 2021, from

https://www.bursamalaysia.com/sites/5bb54be15f36ca0af339077a/assets/5d5e64435b711
a6dacd763ee/FKLI_Product_Brochure_230119.pdf.

5. IG, P. (2021). Fundamental analysis definition. IG. Retrieved 21 April 2021, from
https://www.ig.com/en/glossary-trading-terms/fundamental-analysis-definition.

6. Technical Analysis of Stocks and Trends. Investopedia. (2021). Retrieved 21 April 2021,
from https://www.investopedia.com/terms/t/technical-analysis-of-stocks-and-trends.asp.

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