JADE: How the scheme to make money failed

20070606 There has been a lot of hype by market participants on how JADE Crude Palm Oil futures will take off, take liquidity out of Bursa cPO futures contract, how their ecbot platform has 20000 terminals worldwide, they got clout of SGX/CBOT behind them etc etc. Right now this morning on the first day of launch of the USD CPO contract the volume traded is 70. 70? Pitiful.....

Why did they not take off? They lack people.... Specifically they lack a healthy population of locals to act as liquidity providers. JADE did try to woo the Bursa locals, but hey no scratch trade providions who wants to go? That is why Bursamalaysia has the upperhand because they have a valuable intangible asset: the Locals. Now that Bursamalaysia even waived the RM20,000 membership entrance fee and maintain the rebates and scratch trades providion, Bursa should be highly commended for their foresight and vision. Without people JADE contracts won't take off...

The next question is the foolhardiness to create another exchange JADE. Why not just launch contracts under the SGX brand? The answer is the boffins in CBOT and SGX thought they could creak and skim more profits from another vehicle, by selling servers, computers (front end), software etc. Bursa take heed..... make your money from clearing and trading fee.....not by charging arm and leg for servers and ocmputers.... DMA, go for FIX lah, don't start with stupid MNTP so you can sell each broker a couple of servers for RM100000.....