Market Turnover
-






-
-
|
|
|
|
|
|
-
-
-
Loading

Primary Market Maker Program

There are three types of market makers in HKEX's options market:
- Primary Market Maker (PMM);
- Market maker providing continuous quotes (CQMM); and
- Market maker responding to quote request (QRMM).

PMM is available to Hang Seng Index (HSI) Options, Hang Seng China Enterprises Index (HHI) Options, Hang Seng Tech Index (HTI) Options and selected stock options classes. PMM is required to provide continuous quotes (CQ) and also responds to quote requests (QR).

HSI, HHI and HTI Options PMM Program

HSI, HHI and HTI Options PMM is required to:

•       provide CQ in not less than 100 option series (See Table 1A for details); and

•       respond to at least 70% of QR issued for all short-dated expiry months (See Table 1B for details)

Obligations in terms of quote size, bid/ask spread and the percentage of trading hours to provide CQ are pre-determined. (See Table 1C).

For the list of HSI, HHI and HTI options PMM, please refer to:

http://www.hkex.com.hk/eng/prod/drprod/hkifo/RTlist_equityindex.htm

Obligations

Table 1A -  CQ Obligations

Assigned CQ series 100 series
CQ series selection pool:
Contract Month Moneyness Call Put 
Spot month Nearest OTM 15 15
Nearest ITM 2 2
2nd calendar month Nearest OTM 15 15
Nearest ITM 2 2
3rd calendar month Nearest OTM 15 15
Nearest ITM 2 2
4th calendar month Nearest OTM 15 15
Nearest ITM 2 2
1st quarter Nearest OTM  15 15
Nearest ITM 2 2
2nd quarter Nearest OTM 15 15
Nearest ITM 2 2
3rd quarter Nearest OTM 15 15
Nearest ITM 2 2
Sub-total 119 119
Total 238
Min. Trading Hours  90% of trading hours in T Session in a month


Table 1B -  QR Obligations

Min. Respond to QR Requirement 70% of QR received in T Session in a month for all short-dated expiry contract months
Max. Time Limit for Responding to QR 20 secs
Min. Display Time 20 secs


 
Table 1C – Obligations determined by bidding

Level 1
Min Quote Size Spot, 2nd , 3rd, 4th calendar             7
1st, 2nd, 3rd quarter             5
Max Bid/ Ask Spread

Spot, 2nd, 3rd, 4th calendar 1-750 points Max (30 points, 10% of bid)
> 750 points             75 points
1st, 2nd  quarter 1-750 points Max (40 points, 15% of bid)
> 750 points             115 points
3rd quarter 1-750 points Max (50 points, 20% of bid)
> 750 points             150 points
Min. CQ Trading Hours             90%

  

Incentives

1.  Upon fulfillment of obligations, PMM will pay:

(i)   a discounted trading fee for each HSI Options, HHI Options and HTI Options contract traded by PMM:  

Product

Standard

CQMM

QRMM

PMM

HSI Options HK$ 10.00 HK$ 2.00
HHI Options HK$ 3.50 HK$ 0.50
HTI Options  HK$ 5.0  HK$ 1.0 

(ii)  a discounted trading fee on transactions effected in other Stock Index Futures and Stock Index Options products with the same underlying index, provided that the number of contracts that are eligible for a discounted trading fee in any calendar month should not exceed the volume of the HSI Options, HHI Options and HTI Options traded by the PMM in that calendar month (adjusted to equivalent contract size in the respective products). For details, please refer to the Chapter 3 of Trading Procedures for Stock Index Futures and Stock Index Options of the HKFE Rules.

2.   PMM may apply to the Exchange for a waiver of the monthly sub-license fee for up to 16 OMnet Application Programming Interface (OAPI) connections (i.e. $2,600 per month per connection or equivalent) to HKATS for HSI Options PMM, up to 8 OAPI connections to HKATS for HHI Options PMM and up to 4 OAPI connections to HKATS for HTI Options PMM

3.   PMM may apply to the Exchange for additional throughput with mass quote (MQ) function and Market Maker Protection function:

Transaction per second (TPS) with MQ: 1 TPS with MQ for every 3 assigned CQ series
OAPI connection setting for TPS with MQ: PMM may select any combination of 5, 10, 20 or 50 TPS per OAPI connection with MQ
Market Maker Protection: Provided in respect of options in respect of which the PMM is acting in its capacity as such

 

Stock Options PMM Program 

  Stock Options PMM is required to:

•       provide CQ in not less than 150 option series (See Table 2A for details); and

•       respond to at least 80% of QR issued for all expiry months (See Table 2B for details)

Obligations in terms of quote size, bid/ask spread and the percentage of trading hours to provide CQ are pre-determined. (See Table 2C).

For the list of stock options PMM, please refer to: 

http://www.hkex.com.hk/eng/prod/drprod/hkifo/RTlist_stockoptions.htm

Obligations 

Table 2A - CQ Obligations

Assigned CQ series 150 series
CQ series selection pool:
Contract Month Series Call Put
Spot month Nearest OTM 10 10
Nearest ITM 2 2
2nd Calendar month Nearest OTM 10 10
Nearest ITM 2 2
3rd Calendar month Nearest OTM 10 10
Nearest ITM 2 2
4th Calendar month Nearest OTM 10 10
Nearest ITM 2 2
1st Quarter month Nearest OTM 10 10
Nearest ITM 2 2
2nd Quarter month Nearest OTM 10 10
Nearest ITM 2 2
3rd Quarter month Nearest OTM 10 10
Nearest ITM 2 2
Sub-total 84 84
Total 168

 

Table 2B - QR Obligations

Min Respond to QR Requirement 80% of QR
Max Time Limit for Responding to QR 20 seconds
Min Display Time 20 seconds


Table 2C – Obligations

Maximum bid/offer spread and minimum quote size for Option Class other than that with ETF as underlying securities

Contract Month

Level 1

Level 2

Level 3

Spot month with 3 Business Days or less to expiry

20% of the bid price of the quote or 3 times the best bid/offer spread of the underlying securities, whichever is the lower.

20% of the bid price of the quote or 4 times the best bid/offer spread of the underlying securities, whichever is the lower.

30% of the bid price of the quote or 7 times the best bid/offer spread of the underlying securities, whichever is the lower.

Spot month with 4 Business Days or more to expiry and the next 3 calendar expiry months

10% of the bid price of the quote or 3 times the best bid/offer spread of the underlying securities, whichever is the lower.

10% of the bid price of the quote or 4 times the best bid/offer spread of the underlying securities, whichever is the lower.

20% of the bid price of the quote or 7 times the best bid/offer spread of the underlying securities, whichever is the lower.

The next 2 calendar quarter expiry months

20% of the bid price of the quote or 4 times the best bid/offer spread of the underlying securities, whichever is the lower.

20% of the bid price of the quote or 6 times the best bid/offer spread of the underlying securities, whichever is the lower.

30% of the bid price of the quote or 10 times the best bid/offer spread of the underlying securities, whichever is the lower.

The 3rd calendar quarter expiry month

20% of the bid price of the quote or 8 times the best bid/offer spread of the underlying securities, whichever is the lower.

20% of the bid price of the quote or 12 times the best bid/offer spread of the underlying securities, whichever is the lower.

30% of the bid price of the quote or 20 times the best bid/offer spread of the underlying securities, whichever is the lower.

Minimum Quote Size

30

15

15

 

Maximum bid/offer spread and minimum quote size for Option Class with ETF as underlying securities

Contract Month

Level 1

Level 2

Level 3

Spot month with 3 Business Days or less to expiry

20% of the bid price of the quote or 7.5 times the best bid/offer spread of the underlying securities, whichever is the lower.

20% of the bid price of the quote or 10 times the best bid/offer spread of the underlying securities, whichever is the lower.

30% of the bid price of the quote or 17.5 times the best bid/offer spread of the underlying securities, whichever is the lower.

Spot month with 4 Business Days or more to expiry and the next 3 calendar expiry months

10% of the bid price of the quote or 7.5 times the best bid/offer spread of the underlying securities, whichever is the lower.

10% of the bid price of the quote or 10 times the best bid/offer spread of the underlying securities, whichever is the lower.

20% of the bid price of the quote or 17.5 times the best bid/offer spread of the underlying securities, whichever is the lower.

The next 2 calendar quarter expiry months

20% of the bid price of the quote or 10 times the best bid/offer spread of the underlying securities, whichever is the lower.

20% of the bid price of the quote or 15 times the best bid/offer spread of the underlying securities, whichever is the lower.

30% of the bid price of the quote or 25 times the best bid/offer spread of the underlying securities, whichever is the lower.

The 3rd calendar quarter expiry month

20% of the bid price of the quote or 20 times the best bid/offer spread of the underlying securities, whichever is the lower.

20% of the bid price of the quote or 30 times the best bid/offer spread of the underlying securities, whichever is the lower.

30% of the bid price of the quote or 50 times the best bid/offer spread of the underlying securities, whichever is the lower.

Minimum Quote Size

30

15

15

 


SEHK Stock Code

Underlying Stock Name

HKATS Code

Level of Option Class effective from 30 November 2022

2823

iShares FTSE A50 China Index ETF

A50

2

1299

AIA Group Ltd.

AIA

2

1211

BYD Company Ltd.

BYD

3

941

China Mobile Ltd.

CHT

1

2628

China Life Insurance Company Ltd.

CLI

1

883

CNOOC Ltd.

CNC

1

2822

CSOP FTSE China A50 ETF

CSA

2

27

Galaxy Entertainment Group Ltd.

GLX

3

388

Hong Kong Exchanges and Clearing Ltd

HEX

2

5

HSBC Holdings Plc.

HKB

1

9618

JD.com Inc.

JDC

3

1024

Kuaishou Technology

KST

3

9999

NetEase, Inc.

NTE

3

2318

Ping An Insurance (Group) Co. of China Ltd.

PAI

3

857

PetroChina Co., Ltd.

PEC

1

700

Tencent Holdings Ltd.

TCH

3

2269

WuXi Biologics (Cayman) Inc.

WXB

3

1288

Agricultural Bank of China Ltd.

XAB

1

3988

Bank of China Ltd.

XBC

1

939

China Construction Bank Corp.

XCC

1

1398

Industrial and Commercial Bank of China Ltd.

XIC

1


 *Option class with minimum price fluctuation of HK$0.001.  

Note: Notwithstanding the above, the Exchange may review the spread group (Group A or B) of each option class on

monthly basis to reflect the change in the market conditions.  

In addition,  for option classes with min. price fluctuation of HK$0.01, PMM will not be obliged to quote a spread narrower
than the followings: 

Spread Group Underlying Stock Price PMM Not Obliged to Quote Narrower than
Underlying Securities which is not ETF < $100 Best bid/offer spread of underlying security + 5 minimum price fluctuation
>= $100 Best bid/offer spread of underlying security + 10 minimum price fluctuation
Underlying Securities which is ETF < $100 Best bid/offer spread of underlying security + 7 minimum price fluctuation
>= $100 Best bid/offer spread of underlying security + 15 minimum price fluctuation

 For option classes with minimum price fluctuation of HK$0.001, PMM will not be obliged to quote a spread narrower
than $0.03. 

In addition, PMM will not be obliged to quote for the bid side in response to a QR for a far out-of-the-money Contract
which has a value near zero.  A PMM shall remain obliged to quote for the sell side by issuing a sell limit order with
a limit price no greater than 10 and 30 minimum price fluctuations in option classes with minimum price fluctuations
of HK$0.01 and HK$0.001 respectively within the required response time and for the minimum required quantity and duration.
  

Incentives

 1.    Upon fulfillment of obligations, PMM will pay a discounted trading fee for each options contracts traded by PMM:

Stock Options Tier Standard CQMM / QRMM PMM
1 HK$3.00 HK$1.50 HK$1.20
2 HK$1.00 HK$0.80 HK$0.60
3 HK$0.50 HK$0.40 HK$0.30

2.  PMM may apply to the Exchange for a waiver of the monthly sub-license fee for up to 2 OAPI connections (i.e. $2,600 
     per month per connection or equivalent) to HKATS for each option class.

3.   PMM may apply to the Exchange for additional throughput with mass quote (MQ) function and Market Maker Protection
      function:

Transaction per second (TPS) with MQ: 1 TPS with MQ fo every 3 assigned CQ series
OAPI connection setting for TPS with MQ: PMM may select any combination of 5, 10, 20 or 50 TPS per OAPI connection with MQ
Market Maker Protection: Provided in respect of options in respect of which the PMM is acting in its capacity as such

4.  For each option class, PMM shall entitle to a wavier of one-off fee for applying for an increase in the Central Gateway throughput rate by one standard Central Gateway throttle rate.


Updated 30 Jun 2017