Standard Combination Order is the simultaneous purchase and/or sale of two different series with the same underlying. Each standard combination series is pre-defined by HKEx as a combination strategy with two legs in HKATS.   For example, Calendar Spread in futures market and selected options strategies in Hang Seng Index (“HSI”) Options market. 

Traders in HSI Futures market have been using Standard Combination Order in HKATS for calendar spreads (i.e. buy and sell two futures contracts with different expiration date simultaneously) and rolling their open positions from spot month to the next month since June 2000.  The orders have been used actively in futures trading, especially approaching the end of each calendar month.

HSI Options standard combination series is pre-defined in HKATS that involves two options legs (i.e. buy or sell both call and put options at the same/different strike price and on the same expiration date simultaneously).
    

On each trading day, there are standard combination series in HSI Options market available for trading, in both spot month (except for the last few trading days of the spot month contract) and spot next month.  Exchange will base on the settlement price of spot month futures contract to determine strikes for the standard combination series in HSI Options market on the following trading day.*

*On the last trading day of spot month contract, the settlement price of spot next month futures contract will be used to determine the strikes of standard combination series on the following trading day.
  

HKATS generates derived order from the price of the outstanding Standard Combination Order and the prevailing market price of each individual leg. In addition, user can enter 'Day', 'Fill-or-Kill (FoK)' and 'Fill-and-Kill (FaK)' order for standard combination series, while Block Trade is not allowed to be executed.  As all the combination series expire and rebuilt on a daily basis, no 'Good Till Cancel (GTC)' order is allowed.
  

According to the Error Trade Rule 819B, no error trade can be claimed on a standard combination series.  However, a Broker can claim Error Trade on each leg of the standard combination series separately.
  

Standard combination trades are reported in corresponding legs of the standard combination series.  All the standard combination trades (i.e. Standard Combination Order matches with other Standard Combination Order) are reported in HKATS through the Ticker, Company Trades and Clearing Trades windows with a special deal flag, 'STDC'.
  

The benefit of using standard combination order is that it can be placed as a limit order instead of a market order, making each order visible to all HKATS users.  Also, the transaction cost is likely to be reduced in terms of the spreads between the limit price and the bid/ask prices.
  

Block Trade should not be executed during the Pre-market period.
  

Within 30 minutes of the execution of the Block Trade, Exchange Participants* will be notified by phone if any criteria (such as permissible price range, minimum volume threshold) have not been met or any special margin is required. If all criteria have been met and the special margin could be settled within the prescribed time, the Block Trade would be novated and guaranteed by the Clearing House without further notice.
  

Special margin may be required as a significant deviation may exist between  the prevailing market price and the executed price of the Block Trade.
  

There is no penalty in executing an invalid Block Trade.