Account Registration for Commodity Trading in the Philippines
The Philippines maintains a two-tiered tariff policy for sensitive agricultural products such as pork, poultry, coffee, sugar and corn. These items are subject to Tariff Rate Quotas (TRQs), with all imports outside the Minimum Access Volumes (MAV) being taxed at an increased out-of-quota rate.
Trading accounts in the Philippines must be registered with the Philippine Department of Trade and Industry (DTI) under their Account Registration Program. This is an essential step for trading in the Philippines, especially when dealing with rice or other sensitive commodities.
A breakdown of each Tuesday’s open interest
Open interest is the number of contracts traded in a future or option market. This number fluctuates constantly as traders buy and sell contracts, often used to decide whether a market is trending or range-bound.
To help you better comprehend the market, TD Ameritrade provides a breakdown of each Tuesday's open interest for markets where 20 or more traders hold positions equal to or above reporting levels set forth by the Commodity Futures Trading Commission (CFTC). This chart offers an unparalleled perspective into market activity.
Interpreting market data requires focusing on active areas. Here, traders are most likely to make changes and experience higher price movement.
As a trader, you can use this data to manage your risk and seize opportunities. For instance, if open interest is increasing in an area of the market you're monitoring, take necessary action to secure your position or gain exposure to new ones.
One of the more complex elements of this calculation involves identifying which traders are opening and closing trades. Sometimes this leads to an increase in open interest, while other times it could result in a decrease. It's essential to remember that traders' decisions regarding open or close a trade have an effect on their overall position size and price movement.
Each Friday at 3:30 pm Eastern time, the Commodity Futures Trading Commission (CFTC) releases the Commitments of Traders (COT) report. This breakdown provides valuable insight into open interest among various types of traders.
The CFTC initially disaggregated the report to improve transparency by breaking traders into four reportable categories: Producer/Merchant/Processor/User, Swap Dealers, Managed Money and Other Reportables. These represent traditional hedgers and speculators with positions tied to physical commodities. A "swap dealer" is a trader who deals primarily in swaps for commodities and utilizes futures markets as an avenue to manage or hedge risk associated with those swap transactions. Counter parties to these swap dealers may include speculative traders or traditional commercial clients managing exposure from dealings in physical commodities.
A "money manager" is a registered commodity trading advisor (CTA), registered commodity pool operator (CPO), or unregistered fund identified by the CFTC that manages and conducts organized futures trading for their clients.
The CFTC requires large speculators and commercial traders to report their net positions twice each month to the agency. These individuals typically include fund traders or professional traders with extensive expertise in specific fields who carry large, reportable positions. Non-reportable positions are determined by subtracting these large traders from total open interest; these could include small investors or hedgers who do not have sufficient assets for reporting to the CFTC.
Commercial and non-commercial holdings
Commodity trading offers the potential to generate a healthy return on investment (ROI). What's even better, it doesn't require much capital to get started, making it an accessible investment choice even for average people. In addition to the traditional assets like stocks, bonds and money market instruments, a well-balanced portfolio should include some exotic assets like oil and gas, gold and silver as well as commodities like wheat, corn, barley, soybeans and rice. Commodity markets can be complex and intimidating for beginners, but with proper guidance they can yield substantial profits. To do this successfully, register with a reliable commodity broker who has an established track record in the industry. After that, invest in top-of-the-line technology and software so you can take advantage of all recent advancements.
Spread positions are a type of trading strategy in which you purchase one asset or security and simultaneously sell another, related one. Spreads can be utilized to trade in various ways, such as bullishness, bearishness or sideways markets.
Financial instruments, such as stocks or futures contracts, have a spread. This is the difference between their bid price and ask price; it can be narrowed or widened based on each asset's liquidity.
Numerated is a financial spreading solution that makes it simple to track every number on documents or footnotes and automates financial analysis so you can focus on what matters most: building relationships with customers. With its 100% accurate spreads generated in under 5 minutes with built-in granularity, Numerated allows for efficient management of customer relationships.
This paper seeks to investigate the causality and dynamic interaction between COVID-19 daily infections, the Philippine stock exchange index (PSEI), peso-dollar exchange rate (PHUSD) and retail pump price of diesel (DIESEL). A robust least squares regression with vector autoregression approach was employed in this research; paired correlation diagnostics suggest some form of negative linear association between the number of COVID-19 daily infections, PSEI, PHUSD and DIESEL.
We observed that a positive shock to the number of COVID-19 daily infections significantly affects PSEI, PHUSD and DIESEL in the short run; however its effects diminish gradually and become stable over time. Furthermore, when looking at dependent variables like Philippine stock exchange index or peso-dollar exchange rate as dependent variables, null hypothesis rejection occurs at 1 percent significance level and 10 percent significance level respectively.
Changes from the previous report
The Philippines has several regulatory restrictions on commodity trading, such as account registration. The Philippine Securities and Exchange Commission (PSE), the country's securities regulator, requires all individuals who purchase or sell securities to open an account before being allowed to trade on the market.
Under Section 28 of the Commodity Regulations, no broker or dealer in Pakistan can operate without being registered as such with the PSE. This law applies to both domestic and foreign brokers, dealers, salesmen, and associated persons of these professionals.
In addition, the Philippines has a two-tiered tariff policy for sensitive agricultural items like rice, corn, poultry meat and pork, sugar and coffee. These goods are subject to tariff rate quotas and taxed at an increased out-of-quota rate for imports outside the minimum access volume (MAV) threshold.
This policy seeks to keep prices affordable while giving farmers the ability to diversify their sources of supplies, thus supporting the economy. Since 2005, simple average bound tariff rates on these commodities have remained consistent at 36.5% in 2020 and 41.2% in 2021 respectively.
Additionally, the Philippines has a comprehensive sanitary and phytosanitary inspection system for imported food and agriculture products. Under Administrative Order 9 issued in 2010, accredited importers must obtain Sanitary and Phytosanitary Import Clearance (SPSIC) before shipping any such items into the Philippines.
The Philippines is a member of both the International Organization for Standardization (ISO) and International Electrotechnical Commission (IEC), both organizations which develop voluntary standards to guarantee quality and safety in products, services, and systems across industries such as technology, health care, construction, and agriculture. Furthermore, BPS maintains Technical Committees responsible for creating standards related to food & agriculture as well as electrical/electronic technologies.