Hang Seng China Enterprises Index Futures Options

Introduction

Hang Seng China Enterprises Index (HSCEI) Futures Options are designed for global investors to execute derivative trading strategies on Hong Kong equity. The contracts complement HKEX’s HSCEI derivatives suite enabling investors to trade and hedge with great flexibility.

Hang Seng China Enterprises Index

The benchmark of China companies listed in Hong Kong

HKEX’s HSCEI Index Futures Options are effective trading and risk management tools for investors wishing to gain or manage exposure to Mainland China companies listed in Hong Kong amid the growing interest in Mainland-related equities.

Comprehensive product ecosystem

HSCEI is used as the base index for a wide variety of derivatives products. HSCEI futures (introduced in December 2003) and options (introduced in June 2004) have become very popular with increasing domestic and international investors’ participation. Together with Flexible HSCEI Options, Weekly HSCEI Options, and Mini- HSCEI Futures and Options, these contracts provide investors with a set of effective instruments to manage risks in Hong Kong-listed Chinese companies.

Related Circulars:

Introduction of Physically Settled Options Contracts on Hang Seng Index Futures and Hang Seng China Enterprises Index Futures
Introduction of Physically Settled Options Contracts on Hang Seng Index Futures and Hang Seng China Enterprises Index Futures on 23 August 2021
Frequently Asked Questions – Position Limits and Large Open Position (“LOP”) Reporting on Physically Settled Options on Futures Contracts
Appointment of Primary Market Makers and Finalised Trading Arrangements for Physically Settled Option Contracts on Hang Seng Index Futures and Hang Seng China Enterprises Index Futures

Press release

Derivatives Market Access Codes

NOTICE:

Participants should ensure the following before engaging in trading or offering Options on Futures products to clients:

• Ensure systems (including front office and back office systems) and operational readiness nd complete a Readiness Test successfully in the HKEX testing environment.
• Necessary measures taken to ensure the end users/clients understand the settlement mechanism and risk involved in the new product (e.g. Client-facing staff / clear client interface and client education).
• Thorough and effective communication made to the clients prior to offering, specifically, on the differences between Options on Index and Options on Futures products.
• Similar to all physically-settled options, an option position holder should be aware that the final P&L of such position would be affected by the price of the underlying asset.
• There may be cases where the delivered position will incur immediate mark-to-market gain/loss (the price of delivered position may not be the same as official settlement price).
• Participants who do not wish positions to settle into futures could opt to square their positions before expiry or consider the cash-settled Options on Index.
•  Participants should closely monitor and manage their risk at all times.