Hong Kong Exchanges and Clearing Limited (HKEx) plans to increase the number of option series assigned to market makers providing continuous quotes for stock options from not less than 18 series per option class to not less than 24 series per option class from 1 February next year, subject to regulatory approval.

Under the revised obligation, market makers which have elected to provide continuous quotes in stock options would be required to select at least 24 option series from a pool of 70 series designated by HKEx (see table).

The objective of the initiative is to improve the market making services for stock options and further enhance the price transparency in the stock options market.

There are currently 54 stock option classes available for trading in HKEx’s derivatives market (for details, please see the Equity Products heading under Derivatives Market in the product section of the HKEx website at www.hkex.com.hk).  In the first 11 months of this year, stock options turnover was 43,149,312 contracts, or about 48 per cent of all turnover in the derivatives market.

Pool of Option Series for Selection by Market Makers Providing Continuous Quotes