Shanghai Futures Exchange To Hike Margin, Trading Limits Ahead Of Holiday

SHANGHAI, May 29 -- Shanghai Futures Exchange will adjust its limits on margin trading and price volatility for all contracts June 3 ahead of the Dragon Boat Festival public holiday, and reset them on June 7 after the break.

The minimum trading margin for all contracts will be raised by one percentage point, the SHFE said in a statement Friday.

On June 7, the margin for aluminum will be set at 6%, while the minimum trading margin for zinc, rebar and wire will be set at 8% if trading on that day doesn't hit upper or lower limits.

Similarly, margin requirements for copper, gold, fuel oil, natural rubber and lead will be set at 8%, 7%, 8%, 13% and 11% respectively.

The upper and lower trading limits for aluminum contracts will be widened to 6% of the previous settlement price starting June 3, and reset to 4% June 8 if trading doesn't hit upper or lower limits the previous day.

Trading limits for all other contracts will be widened to 7% of the previous settlement price starting June 3, and reset to 6% June 8 if trading doesn't hit upper or lower limits the previous day.

The exchange usually makes such changes ahead of long holidays to prevent greater volatility due to movements on the London Metal Exchange when the Chinese market is closed.