The Hong Kong Futures Exchange, a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx), will introduce Mini-Hang Seng Index (Mini-HSI) Options for trading on Monday, 18 November.

The contract multiplier for Mini-HSI Options will be $10 per index point, one-fifth the contract multiplier for Hang Seng Index (HSI) Options, and margins will be set at one-fifth the margins for HSI Options. The mini contract and HSI Option contracts will be fungible, which means market participants will be able to offset positions at the ratio of five mini contracts per one HSI Option contract of the corresponding series.

The trading hours for Mini-HSI Options will be the same as HSI Options: 9:45am-12:30pm and 2:30pm-4:15pm. Professional Market Makers will supply bid and ask quotes ensuring trading liquidity and market depth for investors.

The contract months will be the spot month, the next month and the next two calendar quarter months. When Mini-HSI Options are introduced on 18 November, the following contract months will be available: December 2002, January 2003, March 2003 and June 2003.

Trading fees and levies for Mini-HSI Options will be $3.50 per contract per side, compared with $11.50 per contract per side for HSI Options, and the commission rate will be negotiable.

"We are introducing the Mini-HSI Option contract to complement our mini-HSI Futures contract and provide an opportunity for more individual investors to participate in our stock index options market," said HKEx Deputy Chief Operating Officer Lawrence Fok. "Mini-HSI Options are designed to meet the needs of individual investors and they will give market participants more choice."

To familiarise the market with Mini-HSI Options, HKEx is arranging an education programme, including seminars for investors and briefings for brokers and their professional associations. Details of the seminars will be announced in due course. Exchange Participants can gain a thorough understanding of Mini-HSI Options by completing the Continuous Professional Training Course on the subject organised by HKEx. HKEx will also publish educational articles introducing the features of Mini-HSI Options along with common trading strategies. In addition, frequently asked questions about Mini-HSI Options and other information on the new product such as the contract specifications are available on HKEx's website for investors' easy reference. Materials for independent study on Mini-HSI Options will also be available on HKEx's website soon.