20060428 10:50 am. SSF, single stock futures on 10 stocks started trading today on Bursamalaysia Derivatives. Few things to note:
1 Bid ask is wide on most SSF series
2 Low volume traded
Comment: To be successful, SSF needs to have some market makers willing to make the bid ask, and have the facility to lay off risk in the physical cash market. The wide bid ask is a reflection of the high cost of trading stocks in Malaysia. There needs to be an avenue to lay off risk or arbitrage for it to be worthwhile for market makers or local participant to provide the liquidity. Maybe the Exahange can do like the CBOE, whereby the CBOE market makers (in options) are treated as 'specialists' by the NYSE, so they trade stocks at close to zero costs and at very good margin rates.