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Determinants of futures contract success: Empirical examinations for the Asian futures markets

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Author Info

  • Hung, Mao-Wei
  • Lin, Bing-Huei
  • Huang, Yu-Chuan
  • Chou, Jian-Hsin
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    Abstract

    This study examines key factors that influence the success of exchange-traded futures contracts of Asian futures markets. The results show that successful futures contracts benefit from a large and volatile spot market. In addition, a smaller contract size has a positive effect on the futures trading volume, which in turn contributes to the success of the futures contract. For specific institutional factors, the choice of the trading platform and the relative size of exchanges are both important to the success of futures contracts.

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    File URL: http://www.sciencedirect.com/science/article/pii/S1059056010001243
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    Bibliographic Info

    Article provided by Elsevier in its journal International Review of Economics & Finance.

    Volume (Year): 20 (2011)
    Issue (Month): 3 (June)
    Pages: 452-458

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    Handle: RePEc:eee:reveco:v:20:y:2011:i:3:p:452-458

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    Web page: http://www.elsevier.com/locate/inca/620165

    Related research

    Keywords: Futures contract Successful factor Trading volume;

    References

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    1. Lien, Donald & Shrestha, Keshab, 2008. "Hedging effectiveness comparisons: A note," International Review of Economics & Finance, Elsevier, vol. 17(3), pages 391-396.
    2. Jo Corkish & Allison Holland & Anne Fremault Vila, 1997. "The Determinants of Successful Financial Innovation: an Empirical Analysis of Futures Innovation on LIFFE," Bank of England working papers 70, Bank of England.
    3. Ross, Stephen A, 1989. " Institutional Markets, Financial Marketing, and Financial Innovation," Journal of Finance, American Finance Association, vol. 44(3), pages 541-56, July.
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    5. Pennings, Joost M. E., 1998. "The Information Dissemination Process of Futures Exchange Innovations: A Note," Journal of Business Research, Elsevier, vol. 43(3), pages 141-145, November.
    6. Sandor, Richard L, 1973. "Innovation by an Exchange: A Case Study of the Development of the Plywood Futures Contract," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 119-36, April.
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    8. Glosten, Lawrence R, 1994. " Is the Electronic Open Limit Order Book Inevitable?," Journal of Finance, American Finance Association, vol. 49(4), pages 1127-61, September.
    9. Tashjian, Elizabeth, 1995. "Optimal futures contract design," The Quarterly Review of Economics and Finance, Elsevier, vol. 35(2), pages 153-162.
    10. Fung, Joseph K.W. & Lien, Donald & Tse, Yiuman & Tse, Yiu Kuen, 2005. "Effects of electronic trading on the Hang Seng Index futures market," International Review of Economics & Finance, Elsevier, vol. 14(4), pages 415-425.
    11. Johnston, Elizabeth Tashjian & McConnell, John J, 1989. "Requiem for a Market: An Analysis of the Rise and Fall of a Financial Futures Contract," Review of Financial Studies, Society for Financial Studies, vol. 2(1), pages 1-23.
    12. Chiou, Wan-Jiun Paul & Lee, Alice C. & Lee, Cheng-Few, 2010. "Stock return, risk, and legal environment around the world," International Review of Economics & Finance, Elsevier, vol. 19(1), pages 95-105, January.
    13. Lien, Donald & Tse, Yiu Kuen, 2006. "A survey on physical delivery versus cash settlement in futures contracts," International Review of Economics & Finance, Elsevier, vol. 15(1), pages 15-29.
    14. Brorsen, B. Wade & Fofana, N'Zue F., 2001. "Success And Failure Of Agricultural Futures Contracts," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 19(2).
    15. Chan, Leo & Lien, Donald, 2002. "Measuring the impacts of cash settlement: A stochastic volatility approach," International Review of Economics & Finance, Elsevier, vol. 11(3), pages 251-263.
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    Cited by:
    1. Quintino, Derick David & David, Sergio Adriani, 2013. "Quantitative analysis of feasibility of hydrous ethanol futures contracts in Brazil," Energy Economics, Elsevier, vol. 40(C), pages 927-935.

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