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Go to Bursa Malaysia official website, there is a Derivatives page, we can find the market statistics section and get all kind of historical data on futures products traded in Bursa Malaysia Derivatives. There is an interesting page that tell us the market demography on cpo futures locals as shown below:

source: Bursa Malaysia

What was the percentage contributed by locals from the above table October 2014 to March 2015? More than 30% of the cpo futures total volume was generated by locals!

The memory of cpo futures open outcry in the KLCE... Local's vest:

The Local's Vest

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The Sun Business on Thursday, September 21, 1999 with big font words on Locals stay away from trading floor...

Click It For Bigger View

COMMEX, MME, MDEX or KLCE, as I still like it most on the original name, was an open outcry trading exchange plus electronic trading in KLOFFE before taking over by Bursa Malaysia, and being named Bursa Malaysia Derivatives to manage all futures contracts in Malaysia as what we call it at present.

The "boycott" incident was happened before ending year 1999 where I was a very small player in the open outcry cpo futures trading pit, having bad time to survive but had to follow other locals in taking a long week off. No doubt the satisfaction was there seeing the "50%" drop of trading volume, I was told by locals that there were some locals who started trading again due to personal reasons, paging orders QUIETLY from their own broker houses...

Any way, it is already 16 years now; such memory may have been fading...especially the futures market is getting much bigger now a day but I think only half of those 40 over active open outcry locals who are still trading now and the other half had totally ceased to be locals or just seasoned players in this futures industry!

I did list down some active locals with 3-letter alpha codes out of more than 40 active locals in my first book - Trading Crude Palm Oil Futures @ Bursa Malaysia Derivatives. Readers who have the book can turn to the page and read about the locals.

All knew that if locals did not want to trade, they were the ones not making money...but, sometimes, this kind of demonstrating displeasure did help in waking up the relevant authorities to rectify injustice and acknowledge the locals' efforts in growing the futures industry.     

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A Day Without Locals In KLCE

There was a day where all locals stayed away from the cpo futures floor trading:

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This is a page that I got it from the Star Business on Thursaday, September 21, 1999. See what was the total open position? 6,968 contracts as compared to about 180,000 contracts now a day!

What was the volume? 517 lots! What happened to the open outcry floor trading on that day? 

As quoted in the Bernama, the market was dampened by a boycott on Commex when the call by local traders (who trade on their own behalf) for lower fees in the annual subscription was rejected by the Commex board, dealers said. (Commex was the ex-Bursa Malaysia Derivatives that we used to call KLCE before merging. There were names like MME, KLOFFE and MDEX too.)

I think the average daily volume for cpo futures trading was above 1000 lots when I was a floor trader before turning to be a "new and the last" local there, and such a volume was actually more than 50% drop not 35% drop as shown in the paper!

There will be another interesting page about the cpo futures trading floor at that time when all locals stay away from the cpo futures trading pit. It was about the "boycott"! Wait for a next post.

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Institutional brokerage firm like KAF-Refco brought me in to work at the cpo futures trading desk as the company's floor trader from a typical Chinese physical cum futures brokerage firm called Convest; I was joining KAF-Refco ambitiously in believing they had a complete mathematical system that would probably have made them wildly rich. As I can recall, a well known palm oil analyst cum broker, G.M. Teoh, was also in the trading team, handling millions of ringgits worth of contracts for clients.

Thought they were serious and smarter than everyone else in the market by bringing more professional in full technical advantages on hand signals, the madness had actually turned the cpo futures trading pit into a "madhouse" until there were some floor traders in the forties dared not do trades! Whenever they went near to the pit, they felt they were risking their lives!!! They were so worried to make errors to fill a contract of cpo futures, be it the price or contract month! A kind of phobia in trading and preferably stayed in their own booths. 

Any way, the hoo-ha from KAF-Refco lasted less than one and a half years, I joined the last batch of the new "Locals" in KLCE open out-cry cpo futures trading. Many of whom enrolled were former trading clerks and trading floor employees knew well the risk and reward in trading cpo futures and wished to make their own first gold pots from such a risky trade that easily made or lose thousands in a day for a small trader.

Knowing trading cpo futures was so intoxicating, many never thought of learning how to survive and always forgot the simple theory in trading success like "cut loss fast, let profit run", including me!   

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Technology has made a deep impact on futures trading, open out-cry trading on crude palm oil futures trading generated an average much below 2000 contracts a day when I was still a runner in the cpo futures trading pit in KLCE but electronic trading can help generating more than 2000 contracts in just a few seconds in cpo futures trading presently.

I still remember the chaos day that open out-cry cpo futures trading volume hit 5000 contracts when I was a trader in a newly set up futures company called KAF-Refco, we did 3000 contracts that day! Since the trading copy, as mentioned in previous post, had its limitation by not exceeding 20 contracts per copy (under the KLCE rules), just imagine how many copies would have been raised for the 5000 contracts traded that day! We floor traders had to sort out all the trading copies for more than 3 hours after the cpo futures market was closed at 6pm! 

30,000 open positions was basically at the high end in open out-cry trading but electronic trading has the open positions hit 280,000 before coming down to about 180,000 when this post is written.

As we all know that Locals in cpo futures trading are the speculators but also the market makers. In open out-cry trading, they were the pits traders jumping up and down "insanely" in outsiders' eyes who stood at the 5th floor Gallery watching down the big trading floor on all kinds of hand signals and body gestures in a very noisy environment in DayaBumi Complex.

Today, there is no more such a marketplace. Locals sit in cosy rooms finger press on their keyboards to do trades... no longer jumping up and down with hand signals!

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The "Locals" or the so called licensed speculators were given seats by the "ex" Bursa Malaysia Derivatives through the purchasing of trading permits or "memberships" at RM10,000 or RM30,000 in the 1990s when the BMD was mainly from the two separated entities, KLCE and KLOFFE. I was a Local in CPO Futures trading and did pay the RM10,000 to start trading with the trading permit after being interviewed and approved by the Board from KLCE.

Just for a record, the KLCE was last located in DayaBumi Complex near Dataran Merdeka before the open-outcry trading system was ended in December 2001. Here is the sample contract form issued by all floor traders in the cpo futures trading pit. It showed the Alpha code of Seller and Buyer while stating all the contract month in the International code format, price and size with time stamped to confirm the trade was done at the particular time. As shown below, the month codes and trading copies with time stamped on 27 Dec 2001:

	MONTH	1	2	3	4	5	6	7	8	9	10	11	12
	CODE	F	G	H	J	K	M	N	Q	U	V	X	Z

KLCE trading contract copies

The yellow copy was the seller's copy and seller must do time stamping once a trade was traded and issued a carbonized trading form that contained total five copies. First original white copy for KLCE, two duplicated yellow copies (for seller's clearing broker and seller) and two duplicated red copies (buyer's clearing broker and buyer).

The "Locals" did enjoy low transaction cost and even zero transaction cost on scratch trades which meant  when they buy and sell price at same price in different transaction in same trading day, they paid zero fee. These scratch trades did save a lot of trading cost especially for locals who active in spread trading while helped increasing the liquidity of the cpo futures market.

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Bursa Malaysia Derivatives has become one of the international market place on futures trading benchmark in our global economic system especially on the crude palm oil commodity futures trading which was lunched in early 1980s. By doing a Google search on KLCE, MME, COMMEX, KLOFFE, MDEX and BMD, it is believed that readers will be able to find the history and the "evolution" of Bursa Malaysia Derivatives.

However, the Exchange itself and the speculators who help run them remain largely misunderstood, general thinking, they served no useful function other than a gambling pool being specially set up for those tyranny big boys!

In my first thought, this was actually considered to be a meeting place for gamblers - professional gamblers !!! It was especially true when I first stepped in the pit where the open-outcry crude palm oil futures trading floor located in the Dayabumi Complex near Merdeka Square, Kuala Lumpur in mid 1990s.  

The Exchange had since been transformed into a sophisticated electronic trading market place (year 2000) and partially owned by one of the world largest and busiest Exchanges. You may call it a licensed casino, but the Exchange itself is the real free and "regulated" market place where speculators serve a very important function helping the Exchange to be a well-known "licensed casino", making sure every buyer and seller is part of a pair like socks we wear that creates volumes.

With all the sounds, friends and chaotic trading activities I had missed in KLCE in 1990s, I wish there is a time machine that bring me and you back to learn the "hand signals" to make a trade like other speculators did - they were the "Locals". 

They are the speculators with a mindset of high risk high return, make fortunes or end up broke!