Hong Kong Exchanges and Clearing Limited (HKEx) will introduce 20 International Stock Futures contracts and 20 International Stock Options contracts, for trading on Thursday, 4 October, subject to the approval of the Securities and Futures Commission.
The International Stock Futures contracts are standard cash-settled stock futures contracts. The International Stock Options contracts are European-style cash-settled options on the International Stock Futures contracts.
The underlying stocks for the International Stock Futures and Options (ISFO) contracts are five stocks from each of the following markets: Japan, South Korea, Taiwan and the US. The underlying stocks were chosen based on several factors, including liquidity, market capitalisation and public awareness.
"With our International Stock Futures and Options, investors will have access to futures and options based on leading stocks from Asia and the US in one convenient marketplace," said Frederick Grede, Chief Operating Officer of HKEx.
Key features of the ISFO contract specifications and a list of the underlying stocks accompany this news release.
The list of the underlying stocks is also posted on the HKEx website (www.hkex.com.hk) along with the trading calendar and the complete contract specifications.
Contract Multiplier
The contract multiplier of International Stock Futures is one board lot size of the underlying stock.
Options Style
International Stock Options are European-style options. The underlying instrument of the options contract is the corresponding International Stock Futures contract.
Price Quotation
The prices of ISFO contracts will be quoted in the currency of the underlying market.
Contract Months
There will be five contract months for both futures and options trading: spot month, next two calendar months and next two quarterly months (i.e. March, June, September and December). At the planned launch on 4 October, the contract months available for trading will be November 2001, December 2001, January 2002, March 2002 and June 2002.
Trading Hours
The trading hours of ISFO contracts will be from 8:00 a.m. to 5:00 p.m. (Hong Kong time) on each business day of the underlying market without any break during the trading period.
The closing time of the expiring contract month of Japanese, Korean and Taiwanese contracts will be the same as that in the underlying market. The closing time of US contracts on the Last Trading Day will be 5:00 p.m. (Hong Kong time).
Last Trading Day
The Last Trading Day of Japanese, Korean and Taiwanese contracts will be the Hong Kong business day immediately preceding the last Hong Kong business day of the contract month. If that day is not a trading day in the underlying market, the Last Trading Day shall be the immediately preceding trading day in the underlying market, which may or may not be a Hong Kong business day.
The Last Trading Day of US contracts will be the third Friday of the contract month.
Final Settlement Price
The Final Settlement Prices of ISFO contracts will be the official closing prices of the underlying stocks in their home markets on the Last Trading Day.
Final Settlement Day / Expiry Day
The Final Settlement Day / Expiry Day will be the first Hong Kong business day after the Expiry Day.
Settlement Currency
Variation adjustments of ISFO contracts will be calculated in the currency of the underlying market but converted and denominated in US dollars for settlement.
Trading Fees
The Exchange Fee will be US$0.45 per side. In addition, there will be a Securities and Futures Commission Levy of US$0.13 and Compensation Fund Levy of US$0.07.
Commission Rate
Brokerage commissions for ISFO contracts will be negotiable.
Holiday Schedules
Trading of ISFO contracts will be conducted on the business days of the underlying markets, which may or may not be a Hong Kong business day. The trading calendars for the ISFO contracts will be posted on the HKEx website before trading commences.
Trading Suspension
When trading in the underlying stock is suspended, trading in the corresponding ISFO contracts will also be suspended as soon as practicable after prior notification to the marketplace.
List of Underlying Stocks of International Stock Futures and Options Contracts