Product Descriptions 
01/09/2017 
 

Hang Seng China Enterprises Index Futures & Options

Introduction

There has been growing investors' interest in China-related securities resulting from the rapid expansion of Mainland economy.  The Hang Seng China Enterprises Index (HSCEI) is a market capitalisation-weighted stock index which is compiled and calculated by Hang Seng Indexes Company Limited .  The HSCEI tracks the performance of major H-shares.  H-shares are Renminbi-denominated shares issued by People'S Republic of China (PRC) issuers under PRC law and listed on the Stock Exchange of Hong Kong, the par values of which are denominated in Renminbi, and which are subscribed for and traded in Hong Kong dollars. 

The latest list of constituent stocks and compilation methodology are available on the website of Hang Seng Indexes Company Limited at   http://www.hsi.com.hk

HSCEI Index Futures

The HSCEI Index futures were introduced in 8 December 2003 based on the underlying HSCEI.

HSCEI Index Options

Following the immediate success of the HSCEI Index futures, the HSCEI Index options were introduced in 14 June 2004.  On 8 February 2010, Flexible Index Options with flexibility in setting strike prices and expiry months were introduced to facilitate the booking of customized over-the-counter option contracts.

Advantages of Trading HSCEI Index Futures and Options

 Flexible Trading Strategies

  • HSCEI Index Futures and Options provide opportunities for long or short strategies.  Besides, investors can use HSCEI Index Futures and Options as hedging strategies (to protect the HSCEI portfolios against a declining market) or spreading strategies (to profit from the relative performance of two markets, e.g. HSCEI Vs HSI). 

 Fast Execution

  • A cost-effective way to track and establish broad market exposure linked to the performance of H-share companies.

Efficient Use of Capital

  • HSCEI Index Futures and Options are traded on a margin basis.  The capital outlay is much less than buying a H-share companies portfolio.

Low Transaction Costs

  • The transaction costs for trading HSCEI Index Futures and Options are lower than trading a basket of constituents in HSCEI.

Clearing House Guarantee

  • Futures and Options contracts are registered, cleared and guaranteed by HKEx's Clearing House, eliminating counter-party risk.  (The Clearing House guarantee does not cover a Clearing Participant's obligations to its clients.  Investors should exercise due care and diligence when deciding through whom they will conduct business.)