The Hong Kong Futures Exchange (HKFE) published an educational article today that examines electronic trading at the HKFE.

In "Competition Makes Electronic Trading in Futures and Options a Must," Dr. Y.H. Lui, Directory of the Centre for Continuing and Community Education at The Open University of Hong Kong and Mr. Kevin Cheng, the HKFE's Head of Economic Research, look at the events leading up to the Exchange's planned migration to full electronic trading, the major features of the HKATS electronic trading platform and the advantages of trading on HKATS.

The authors also address concerns about market liquidity after Hang Seng Index (HSI) Futures and Options migrate to HKATS on August 2 and September 1 respectively. They explain that an examination of local and international experiences shows that in all cases volume has increased after the shift from open outcry trading to electronic trading. And they suggest liquidity will be supported by a variety of factors after migration.

"HKATS gives investors more market transparency. It eliminates the time and place advantage of being on the trading floor and automatically executes an order on a first-in, first-served and best price basis. All participants can trade interactively and on a level playing field. Hence it will attract more investors to trade," the researchers say. They add that as the HSI is known for its volatility, local investors will continue to trade HSI Futures and Options after migration.

Today's article is the fourth in a series of HKFE educational articles aimed at enhancing public understanding of the futures markets and the important role they play in Hong Kong. It can be found on the Exchange's web site: www.hkfe.com, under the News Centre's Special Reports section.

For further enquiries, please contact HKFE Corporate Communications: Mr. Mark Tung on 2842 9448 or Miss Chiu Yeung on 2842 9322.