Hong Kong Exchanges and Clearing Limited (HKEx) announced today (Thursday) stock option changes that will give investors more choice.
From 1 June this year, the narrowest set of strike intervals, Strike Interval Group B (please see the table below for a comparison of Strike Interval Group A and B), will be applied to all stock option classes and all stock option classes will have the third quarter expiry month for trading (the expiry months available for trading in June this year will be June, July, August, September, December 2010 and March 2011).
These arrangements have been in place for 21 of HKEx's 51 stock option classes since 2 November last year and that group will not be affected by the changes on 1 June. The changes will only apply to the other 30 stock option classes.
The changes will increase the strike series in HKEx’s stock option market by about 50 per cent.
"Market participants will have more choices after 1 June," Calvin Tai, HKEx's Head of Derivatives Market, said. "They will be able to find a stock option with a strike price close to the underlying stock's price more easily after strike intervals have been narrowed, and they will be able to trade longer maturity."
In the first four months of this year, 16,284,566 stock option contracts were traded in HKEx's derivatives market, accounting for 49 per cent of the total market turnover.
Stock Option Classes with Strike Interval Group B and a Third Calendar Quarter Expiry Month from 1 June 2010
Aluminum Corporation of China Limited
BOC Hong Kong (Holdings) Limited
BYD Company Limited
Cathay Pacific Airways Limited
China CITIC Bank Corporation Limited
China Coal Energy Company Limited
China Communications Construction Company Limited
China COSCO Holdings Company Limited
China Overseas Land & Investment Limited
China Railway Construction Corporation Limited
China Railway Group Limited
China Unicom (Hong Kong) Limited
CITIC Pacific Limited
Esprit Holdings Limited
Foxconn International Holdings Limited
Guangzhou R&F Properties Co, Ltd.
Henderson Land Development Company Limited
Hongkong Electric Holdings Limited
Huaneng Power International, Inc
Jiangxi Copper Company Limited
Li & Fung Limited
MTR Corporation Limited
New World Development Company Limited
PICC Property and Casualty Company Limited
Swire Pacific Limited 'A'
Tencent Holdings Limited
The Bank of East Asia, Limited
The Hong Kong and China Gas Company Limited
The Wharf (Holdings) Limited
Zijin Mining Group Company Limited
Comparison of Strike Interval Group A and B