SHFE To Adjust Margin, Trading Limits For Holidays Sept. 21-Oct. 8

SHANGHAI, Sep 14, 2010 (Dow Jones Commodities News via Comtex) -- The Shanghai Futures Exchange said it will adjust its limits for margin trading and price volatility in all futures contracts traded on the bourse for the Mid-Autumn Festival and the National Day holidays, from Sept. 21 to Oct. 8.

The minimum margin for trading of aluminum and gold contracts will be raised to 12% of contracts' value from 7% starting Sept. 21, the last trading session before the Mid-Autumn Festival holiday, the SHFE said in a statement published on its website.

The changes will revert to 7% from settlement time on Oct. 8, the first trading session after the weeklong National Day holiday, if trading on that day doesn't hit upper or lower limits, it said.

For zinc contracts, the same 12% minimum margin will apply starting Sept. 21, and it will revert to the normal 7.5% starting Oct. 8, if trading on that day doesn't hit upper or lower limits. With the same conditions, minimum margins for trading of rebar, wire, natural rubber, and fuel oil contracts will be raised to 12% from 8%, and will return to the normal level after the National Day holiday period.

For copper contracts the same minimum margin and conditions will apply, with the normal level before and after the holidays being 8.5%.

The upper and lower trading limits for all contracts traded on the SHFE will be expanded to 7% of previous settlement prices from 5% starting Sept. 21, and will be adjusted back to 5% on Oct. 9, provided trading on Oct. 8 doesn't hit upper or lower limits.

The futures bourse usually makes such changes ahead of long holidays to mitigate risks of higher volatility due to movements on the London Metal Exchange while the Chinese market is closed.

SHFE will be closed from Sept. 22 to Sept. 24 for the Mid-Autumn Festival and from Oct. 1 to Oct. 7 for National Day.