Hang Seng China Enterprises Index Options

Hang Seng China Enterprises Index Options

Introduction

There has been growing investors' interest in China-related securities resulting from the rapid expansion of Mainland economy. The Hang Seng China Enterprises Index (HSCEI) is a market capitalisation-weighted stock index which is compiled and calculated by Hang Seng Indexes Company Limited . The HSCEI tracks the performance of major H-shares. H-shares are Renminbi-denominated shares issued by People's Republic of China (PRC) issuers under PRC law and listed on the Stock Exchange of Hong Kong, the par values of which are denominated in Renminbi, and which are subscribed for and traded in Hong Kong dollars.

The latest list of constituent stocks and compilation methodology are available on the website of Hang Seng Indexes Company Limited at http://www.hsi.com.hk

Hang Seng China Enterprises Index

Following the immediate success of the HSCEI Index futures, the HSCEI Index options were introduced in 14 June 2004. On 8 February 2010, Flexible Index Options with flexibility in setting strike prices and expiry months were introduced to facilitate the booking of customized over-the-counter option contracts.

Advantages of Trading HSCEI Index Futures and Options

Flexible Trading Strategies

HSCEI Futures and Options provide opportunities for long or short strategies. Besides, investors can use HSCEI Futures and Options as hedging strategies (to protect the HSCEI portfolios against a declining market) or spreading strategies (to profit from the relative performance of two markets, e.g. HSCEI Vs HSI).

Fast Execution

A cost-effective way to track and establish broad market exposure linked to the performance of H-share companies.

Efficient Use of Capital

HSCEI Futures and Options are traded on a margin basis. The capital outlay is much less than buying a H-share companies portfolio.

Low Transaction Costs

The transaction costs for trading HSCEI Futures and Options are lower than trading a basket of constituents in HSCEI.

Clearing House Guarantee

Futures and Options contracts are registered, cleared and guaranteed by HKEx's Clearing House, eliminating counter-party risk. (The Clearing House guarantee does not cover a Clearing Participant's obligations to its clients. Investors should exercise due care and diligence when deciding through whom they will conduct business.)

Updated 24 Oct 2023

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Contract Summary

Hang Seng China Enterprises Index Options

Item

Standard Options

Flexible Options

Underlying Index

Hang Seng China Enterprises Index

HKATS Code

HHI

XHH

Contract Multiplier

HK$50 per index point

Minimum Fluctuation

One index point

Contract Months

Short-dated Options:-
Spot, next three calendar months & next three calendar quarter months

Long-dated Options:-
the next three months of June & December and the following 3 December months

Any calendar month not further out than the longest term of expiry months that are available for trading

Exercise Style

European Style

Option Premium

Quoted in whole index points

Strike Prices

Index Points	Strike Interval
Short-dated Options:
≥ 20,000	200
≥ 5,000 and < 20,000	100
< 5,000	50
Long-dated Options:
≥ 20,000	400
≥ 5,000 and < 20,000	200
< 5,000	100

Trading Hours

For standard Index Options: 9:15 am - 12:00 noon, 1:00 pm - 4:30 pm & 5:15 pm - 3:00 am
(Expiring contract month closes at 4:00 pm on the Expiry Day)

For Flexible Index Options: 9:15 am - 12:00 noon & 1:00 pm - 4:30 pm
No request of series creation is acceptable within the last 30 minutes before market close
(Expiring contract month closes at 4:00 pm on the Expiry Day)

Expiry Day

The Second last Trading Day of the Contract Month

Official Settlement Price

The average of quotations of Hang Seng China Enterprises Index taken at (i) five (5) minute intervals from five (5) minutes after the start of, and up to five (5) minutes before the end of, the Continuous Trading Session of SEHK; and (ii) the close of trading on SEHK on the Expiry Day

Transaction Costs

Exchange Fee                HK$3.50
Commission Levy             HK$0.54
   Commission Rate             Negotiable

Please visit “Rules, Regulations and Procedures of the Futures Exchange” under “Rules and Regulations” of the HKEx website for full contract specifications.

Flexible Index Option

Creation, Execution, Clearing and Settlement of Flexible Index Options

List of Exchange Participants with Flexible Index Options Trading Access

Updated 16 Sep 2017

Margin Table

Trading Fees and Commission

Hang Seng China Enterprsies Index Options

Exchange Fee: HK$3.50 per contract per side

Commission Levy: HK$0.54 per contract per side

Investor Compensation Levy*: HK$0.00 per contract per side

Total: HK$4.04 per contract per side

Commission: Negotiable

: * The amount indicated above is subject to change from time to time.

List of Market Makers or Liquidity Providers

Equity Index Products

There are liquidity provider and 3 types of market makers in the equity index products market:

- Primary Market Maker (PMM); and

- Market maker providing continuous quotes (CQMM); and

- Market maker responding to quote request (QRMM).

For the details of the obligations and incentives of liquidity providers and market makers, please refer webpage.

Below is the list of Short Code for EP of Liquidity Provider, PMM, CQMM and QRMM:

	Market Makers / Liquidity Providers
	BNP	CFT	CTD	DAI	FLW	GHF	IBG	IMC	JST	KGI	MPF	NHA	NHT	OPT	ORN	SGS	SQH	YKR
Hang Seng China Enterprises Index Futures Options			PMD					PMD			PMD		PMD	PMD			CMD	PMD
Hang Seng Index Futures Options			PMD					PMD			PMD		PMD	PMD			CMD
Hang Seng Index Options	CMD		PMD				CMD	SMW			SMD		PMD	SMW			CMD	PMD
Hang Seng TECH Index Futures Options								PMD			PMD		PMD	PMD			CMD
Hang Seng Tech Index Options							CMD	PMD			PMD		PMD	PMD			CMD
HHI Options	CMD		PMD				CMD	SMW			SMD		PMD	SMW			CMD
HSCEI Dividend Point Index Futures	CMD
HSI Dividend Point Index Futures	CMD
MCH Options			CMD				CMD	CMW			CMD		CMD	CMW
MHI Options			CMD				CMD	CMW			CMD		CMD	CMW				CMD
MSCI AC Asia ex Japan Net Total Return Index Futures					CLD						CLW
MSCI China A 50 Connect (USD) Index Futures		CLW			CLD	CLD				CLW	CLD		CLD		CLW	CLW
MSCI China Net Total Return (USD) Index Futures		CLW							CLD	CLD
MSCI EM Asia Net Total Return (USD) Index Futures					CLD				CLD		CLW
MSCI Emerging Markets Net Total Return (USD) Index Futures									CLD
MSCI Hong Kong Net Total Return (USD) Index Futures					CLD				CLD		CLD
MSCI India (USD) Index Futures		CLW
MSCI India Net Total Return (USD) Index Futures					CLD				CLD		CLW
MSCI Indonesia Net Total Return (USD) Index Futures		CLD
MSCI Japan Net Total Return (USD) Index Futures					CLD						CLD
MSCI Malaysia Net Total Return (USD) Index Futures					CLD						CLD
MSCI Philippines Net Total Return (USD) Index Futures		CLD
MSCI Taiwan (USD) Index Futures		CLN		CLW		CLW									CLN	CLD
MSCI Taiwan 25/50 (USD) Index Futures					CLD
MSCI Taiwan Net Total Return (USD) Index Futures		CLD			CLD						CLW
MSCI Thailand Net Total Return (USD) Index Futures		CLD							CLD
Weekly HHI Options			CMD					CMW			CMD		CMD	CMW			CMD
Weekly HSI Options	CMD		CMD					CMW			CMD		CMD	CMW			CMD	CMD
Weekly HTI Options								CLD			CLD		CLD	CLD			CLD

C – Denotes providing continuous quotes
Q – Denotes responding to quote requests

P – Denotes Primary Market Maker providing continuous quotes and responding to quote requests
S – Denotes combination of C, Q and P

M – Denotes Market Maker
L – Denotes Liquidity Provider
B – Denotes both Market Maker and Liquidity Provider

D – Denotes T Session
N – Denotes T+1 Session
W – Denotes Both T and T+1 Sessions

Market Making/Liquidity providing obligations and Incentives

For details of the Market Making/Liquidity Providing Obligations and Incentives of Equity Index Products, please refer our webpage below:

https://www.hkex.com.hk/Products/Listed-Derivatives/Market-Maker-Program/Market-Maker-Obligations-and-Incentives?sc_lang=en