Hong Kong Exchanges and Clearing Limited (HKEx) plans to introduce long-dated H-shares Index Options and additional long-dated Hang Seng Index (HSI) Options on 31 March, pending the approval of the Securities and Futures Commission.
The plan includes:
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Setting the Strike Prices for long-dated HSI Options and H-shares Index Options 20 per cent above, at and 20 per cent below the at-the-money Strike Price, rounded off to the nearest Strike Price, instead of the current plus or minus 5 per cent for existing long-dated HSI Options.
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Applying the existing strike intervals (see attachment) for long-dated HSI Options to the new long-dated contract months in HSI Options and H-shares Index Options. |
There will be no market-making under the plan as Registered Traders would not be required to respond to quote requests or provide continuous quotes in the long-dated contract months.
Apart from the above, the contract specifications and trading arrangements for HSI Options and H-shares Index Options remain unchanged.
“Additional long-dated contract months in our derivatives market will provide investors with more exchange-traded financial instruments enabling them to take and manage longer-term positions in Hong Kong- and Mainland-related equities,” said HKEx Chief Operating Officer Patrick Conroy. “Active institutional investors have indicated their support for this product concept and we have observed growing investor interest in these markets. Average daily HSI Options volume rose nearly 76 per cent last month from a year ago and average daily H-shares Index Options volume was up more than 192 per cent.”
Please see the attachment for a table highlighting planned changes. The latest information on the futures and options contracts traded on HKEx's derivatives market, including contract specifications, is available on the HKEx website.
Attachment
Contract Months (assuming today’s date, 16 February 2006)