Hong Kong Exchanges and Clearing Limited (HKEx) today published the results of its review of the first six months of After-Hours Futures Trading (AHFT) at HKEx.
HKEx introduced AHFT on 8 April this year, when Hang Seng Index (HSI) and H-shares Index (HHI) futures became available for trading from 5 pm to 11 pm in addition to their regular trading sessions: 9:15 am to 12 noon and 1 pm to 4:15 pm.
HKEx reviewed AHFT from 8 April to 7 October. Some of the review's findings are listed below.
AHFT review findings
- There was retail and institutional investor participation.
- Trading volume vs day trading session volume rose from 2.2 per cent in April to 5.4 per cent in October.
- Nearly half of volume (48 per cent) was between 9:30 and 11:00 pm, when US markets were open.
- Bid/offer spreads were tight.
- Trading was orderly.
- Prices were never more than 2.3 per cent from day trading session close.
- +/-5% price limit, a risk management measure, was not hit.
- Clearing and settlement as well as margin calls were completed smoothly.
HKEx will continue the original risk management arrangements for AHFT, including:
- +/-5% price limit;
- Mandatory margin and variation adjustment call in the morning of the following business day; and
- Capital based position limit monitoring in the AHFT Session.
HKEx plans to extend block trading from its day trading session to AHFT, subject to the Securities and Futures Commission's approval of the proposed rule amendments. HKEx also plans to offer after-hours trading of more of its futures contracts, beginning with Mini-HSI, Mini-HHI and Renminbi Currency futures early next year, and will consider extending AHFT to around midnight because its overlap with US trading hours is reduced by one hour from the initial overlap when the US is on Standard Time instead of Daylight Saving Time. Details will be provided in due course.
"We appreciated the market's support when we introduced AHFT and the very helpful comments we received when we did our six-month review," said Calvin Tai, HKEx's Co-head of Equities and Fixed Income and Currency. "AHFT is off to a good start and we aim to build on its success with the plans we are announcing today."
Ends