Innovations from the UZCE: the currency futures market has been replenished with long-term instruments

Since February 2024, the derivatives market of the Uzbek Republican Currency Exchange (UZCE) has been replenished with new types of instruments - 6, 9 and 12 monthly currency futures contracts.

What are currency futures?

Currency futures are contracts that oblige the buyer to buy and the seller to sell a certain currency at a predetermined price on a certain date in future.

Earlier, the UZCE was the first in the country to introduce trading in short-term currency futures contracts with expiration dates of 1, 2 and 3 months. Now, the range of futures instruments has been replenished with long-term contracts.

Why are new tools being introduced?

The UZCE, taking into account the opinions and suggestions of bidders, creates the necessary conditions for comfortable and profitable participation in stock trading.

The introduction of long-term futures contracts is the result of studying the proposals of bidders and investors who receive income from asset management, including in the government securities market (GS), and who want to hedge their income using various tools.

It is worth noting that before the introduction of “long” futures, traders opened new positions on short-term futures every time to extend positions on currency futures contracts for six months or a year. Now, traders have the opportunity to open positions on a currency futures contract for longer periods - up to one year.

What will the introduction of long-term futures contracts give?

Peace of mind for the future. The participant receives a guarantee of a stable price by concluding a futures contract for the exchange rate, fixing it in advance, without worrying about its fluctuations.

New earning opportunities. Futures contracts are not only a tool for hedging risks, but also a way to make money on the difference in exchange rates.

Some statistics:

By the end of 2023, 3 000 futures contracts were concluded on the UZCE.
The total amount of transactions amounted to $3 000 000.
The basic asset of the UZCE futures contracts is the exchange rate of the USD against the UZS.