November 30, 2018 / 9:19 AM / 6 months ago

UPDATE 1-China's Dalian Commodity Exchange launches swap trading

(Adds details)

BEIJING, Nov 30 (Reuters) - China’s Dalian Commodity Exchange (DCE) said on Friday it launched swap trades, seeking to offer more hedging tools to investors, without specifying which products will be eligible for the trading.

That came after the bourse opened its flagship iron ore futures trading to overseas investors in May and said to launch options on the steelmaking ingredient next year, challenging its rival in Singapore as a global trade centre of bulk commodities.

The Singapore Exchange, the world’s second-biggest marketplace for iron ore derivatives in terms of volume after DCE, started its swap trades in 2009.

A commodity swap is a type of over-the-counter derivative deal whereby a floating price based on an underlying commodity is traded for a fixed price over a specified period.

“Objects of commodity swap trades in the DCE will include futures prices and commodity indexes,” the exchange said.

Traders will need to have no less than 5 million yuan ($719,859) in registered capital and a clean credit record to be able to participate in swap trading.

Swap trades on the DCE will start from 9 am until 3 pm (0100-0700 GMT) in week days.

There was no trade on Friday. ($1 = 6.9458 Chinese yuan) (Reporting by Muyu Xu and Tom Daly Editing by Kenneth Maxwell and Subhranshu Sahu)

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