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I wanted to sell 1,000 board lots of my call warrants and called up the liquidity provider for a quote. Why couldn’t I sell my 1,000 board lots even after I got the quote from the liquidity provider?

The quote size offered by the liquidity provider is limited by the actual liquidity of the relevant hedging vehicle (e.g. the underlying asset or the listed or OTC options linked to the underlying asset). In this case, the liquidity provider may not be able to buy all 1,000 board lots of your call warrants if the liquidity provider cannot unwind such hedging vehicle for all of the 1,000 board lots of your call warrants (for example, because the relevant hedging vehicle is illiquid). The minimum quote size that a liquidity provider is committed to quote is 20 board lots.

What are the liquidity providers’ obligations on derivative warrants linked to overseas underlying assets?

Unlike derivative warrants linked to local indices or other actively traded local stocks, liquidity providers are not required to proactively provide quotes for products linked to an overseas underlying asset. In case you do not see liquidity providers’ quotes in the market, you have to call them to request for quotes. They are obligated to provide quotes within 10 minutes with a maximum bid/ask spread of 20 ticks and a minimum offer size of 20 board lots subject to certain exemptions set out in paragraph 3.3 of the Industry Principles.

I wanted to sell 1,000 board lots of my bull CBBCs and called up the liquidity provider for a quote. Why couldn’t I sell my 1,000 board lots even after I got the quote from the liquidity provider?

The quote size offered by the liquidity provider is limited by the actual liquidity of the relevant hedging vehicle (e.g. the underlying asset or the listed or OTC options linked to the underlying asset). In this case, the liquidity provider may not be able to buy all 1,000 board lots of your bull CBBCs if the liquidity provider cannot unwind such hedging vehicle for all of the 1,000 board lots of your bull CBBCs (for example, because the relevant hedging vehicle is illiquid). The minimum quote size that a liquidity provider is committed to quote is 20 board lots.

What are the liquidity providers’ obligations on CBBCs linked to overseas underlying assets?

Unlike CBBCs linked to local indices or other actively traded local stocks, liquidity providers are not required to proactively provide quotes for products linked to an overseas underlying asset. In case you do not see liquidity providers’ quotes in the market, you have to call them to request for quotes. They are obligated to provide quotes within 10 minutes with a maximum bid/ask spread of 20 ticks and a minimum offer size of 20 board lots subject to certain exemptions set out in paragraph 3.3 of the Industry Principles.

Securities Market

What is the Continuous Trading Session?

The continuous trading session covers periods from 9:30 am to 12:00 noon and 1:00 pm to 4:00 pm in each trading day. During the continuous trading session, the trading system will match orders input into the system in price priority based on the order they are received. An order entered into the system at an earlier time must be executed in full before an order at the same price entered at a later time can be executed.

During the continuous trading session, the system accepts Limit Orders, Enhanced Limit Orders and Special Limit Orders only, with an option for an All-or-Nothing Qualifier that confines the order to be either executed immediately in full or rejected, without being written into the central order book.

Further, the order price input into the trading system (i) must not deviate nine times or more from the nominal price, if available, or is one-ninth or less of that price and (ii) must follow the quotation rules unless the restriction is waived. In addition, the maximum order size is 3,000 board lots.

Investors may refer here for details.

Securities are traded in board lots. How many shares are there in one board lot? Are odd lots (less than one board lot) tradable on the Exchange?

The term "board lot" is commonly used in Hong Kong's securities market to refer to a trading unit. Unlike the Mainland markets where the board lot size is 100 shares, the board lot size of a listed security in Hong Kong is determined by the issuer. Investors may check the board lot size of a security here by inputting the stock code or company name in the relevant field.

Securities of less than one trading unit (i.e. one board lot) is commonly known as an odd lot in Hong Kong. Odd lots are not accepted by the Exchange’s trading system for auto-matching, but there is a special lot market in the system for odd lots trading. Exchange Participants (EPs) may post their odd lot orders onto a designated screen on the trading system for matching by other EPs. In general, share prices of odd lots are slightly lower than that of the same security in the board lot market due to their lower liquidity.

Moreover, securities worth less than $0.01 per share (below the lowest price limit in the board lot market) may also be traded in the odd lot market although they are of a quantity equal to one board lot. For example, when the nominal price of a security is at $0.01, the order price in the odd lot market can be as low as $0.001, which is the system’s lowest limit. However, the order price must not deviate nine times or more from the nominal price or is one-ninth or less of that price. Like the board lot market, the Exchange will provide the market via information vendors with real-time information about the odd lot market to enhance market transparency.

What are the trading parameters for the Orion Trading Platform – Securities Market (OTP-C)?

The trading parameters of OTP-C generally include:

Various order price limits prescribed in the Rules of the Exchange. For the order price limits during (1) POS, please refer to Rules 501G(1B) to 501G(3), 501G(6) and 503(1), (2) CTS, please refer to Rules 503(2), 505A, 506A and 507A, (3) CAS, please refer to Rules 501L(3) – 501L(6) and Rule 501L(9).

In all circumstance, an order shall not be made at a price that deviates nine times or more from the nominal price, if available, or is one-ninth or less of that price:

the maximum order size is 3,000 board lots per order
no restriction on number of outstanding orders per broker ID
the maximum number of outstanding orders per price queue is 40,000

Non-automatched trades concluded by Exchange Participants must also be reported to the Stock Exchange and the information of these trades will be disseminated to the market.

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