IHOFX Trade is a newly established electronic platform that facilitates the completion of agreements by allowing traders to send applications directly from their workstations. The system can be used to trade securities, repurchase contracts, options, and futures contracts in a simultaneous double auction with automated application acknowledgment. The framework also requires securities to be placed in a unilateral auction mode. The theory of "delivery against charge" governs the settlement of securities transactions.
This electronic system is specifically designed for trading with remote trader terminals connecting to the system servers via the Internet, and it can handle an almost infinite number of trading terminals.
General Note
Our General Trading Rules are designed to ensure that all trading activities conducted on the Incheon Options and Futures Exchange Trading Platform are compliant with applicable laws, regulations, and ministry-level rules in the Republic of Korea. These rules serve to protect the rights and interests of all parties involved in trading on the Incheon Options and Futures Exchange Trading Platform, while also safeguarding the public interest. It is important to note that these trading rules apply to all trading operations and related activities organized by the Incheon Options and Futures Exchange. By adhering to these rules, participants can ensure a fair and transparent trading environment that promotes market stability and integrity.
Trading Facilities
The Exchange offers top-of-the-line trading venues and facilities for futures, stock, commodity and cryptocurrency trading and related activities. Our order-matching system, trading seats, and communications systems all work together to create a seamless trading experience for our members. In addition, we understand the importance of being prepared for unexpected situations, which is why we have set up an emergency trading venue in our city of domicile. This venue is available to any Member who is affected by a malfunction of the trading system due to communication system failure or system upgrades. To ensure the safety of trading data, we maintain both local and remote data backups. At the IHOFX, we go above and beyond to provide the best trading opportunities and safeguards for our members.
Essential Trading Systems
The Exchange has implemented margin requirements that are crucial for traders. Margin refers to the funds or stable and liquid securities, such as standard warehouse receipts and government bonds, that are deposited by traders based on relevant rules for trade settlement and performance guarantee. Margin is divided into two categories: Settlement Reserve and Trading Margin. Settlement Reserve is the margin amount not currently in use to maintain current positions in contracts, while Trading Margin is the portion of the margin already in use to maintain current positions in contracts.
After the conclusion of a trade, the Exchange collects Trading Margin at a certain percentage of the contract value or as per the specified method. The Trading Margin requirement is subject to adjustments by the Exchange, which will be separately prescribed in the detailed implementing rules of the Exchange.
Futures trading is governed by two important limits that traders need to be aware of. The first one is the price limit, which states that the trade price of a contract on a trading day must not exceed or fall below the prescribed limit. Orders placed beyond this limit will not be executed and considered invalid. The second limit is the position limit, which refers to the maximum position a member or client is allowed to hold in a particular contract. Adhering to both limits is crucial for successful trading.
Order Placement and Execution
The Exchange offers a range of trading orders including limit orders, market orders, cancellation orders, spread orders, and other orders specified by IHOFX. Trading orders are only valid on the day they are placed. Members can submit buy and sell orders during the order submission window of a call auction and the continuous auction hours. However, it is important to ensure that trading orders are placed within the price limit, as orders placed beyond the price limit are invalid. In addition, a member’s trading order for opening a position will be deemed invalid if its Settlement Reserve is below the minimum balance requirement specified by the Exchange.
The volume maximization principle governs the matching of orders in a call auction. This means that orders are executed at the price that maximizes trading volume during the session. In a call auction, all trades are executed at the same price. In contrast, a continuous auction session uses a price-time priority system to match buy and sell orders. The system automatically matches and executes a bid and an ask when the bid price is higher than or equal to the ask price.
When an order is executed at the limit price, it will be matched and executed based on both close-out priority and time priority. This ensures that the order is fulfilled efficiently while maintaining fairness and transparency in the trading process.
Delivery and Withdrawal
The delivery of futures can be executed either through physical delivery or through alternative methods as directed by the Exchange. Any outstanding futures contract beyond its Last Trading Day must be delivered. Only a member can conduct delivery against an expired contract. Clients must deliver through their carrying members.
The Exchange has set out detailed implementing rules regarding delivery matching rules and delivery procedures. If any Member does not agree with the arrangements or results of delivery, they may request for reconsideration or re-inspection within the time limit prescribed by the Exchange.
The "final settlement price" plays a crucial role in the futures contract as it acts as the benchmark price for the final settlement during delivery. If there is any shortage or overage in the quantity of the commodity delivered, and it falls within the quantity tolerance, the parties will calculate the differential delivery payment according to the Exchange's rules. Moreover, the Exchange specifies the premiums and discounts for delivery at both the benchmark delivery points and non-benchmark delivery points separately. This ensures that the parties involved receive fair payment for the delivered goods, regardless of the delivery location.
Withdrawals from your trading account can only be made using settled funds. When you execute a trade, the proceeds from that trade need to be converted to cash before they can be withdrawn. This process is known as trade settlement. If you have not made any trades or if your trades have already settled, your withdrawal may still be on hold due to anti-money laundering regulations.
All offshore investors need to be aware that there is a minimum holding period on all invested funds. If this minimum holding period is not fulfilled, all funds are subject to taxation. All funds, invested and profited will be subject to a 35% taxation level if the funds are recalled by the investor within a period of six (6) months from the date the funds were invested. When this minimum holding period on invested and profited funds of six (6) months is fulfilled, the funds will not be subjected to taxation.