Volatility Control Mechanism (VCM)

Volatility Control Mechanism (VCM) is designed to protect the market from disorderliness caused by extreme price volatility.  

When VCM is in effect, a five-minute cooling-off period will be triggered if the price deviates for more than a predefined percentage from the last traded price five minutes ago. This provides a window allowing market participants to reassess their strategies, if necessary.  It also helps to re-establish an orderly market during volatile market situations. After the cooling-off period, trading will resume to normal with VCM monitoring. In other words, multiple triggers per trading session is allowed.

Enhancement on Volatility Control Mechanism

• Trading Mechanism of Volatility Control Mechanism (VCM) in the Derivatives Market (Updated on 14 Oct 2022)
• Briefing Materials on Enhancements Implementation (Updated on 5 Mar 2021)
• FAQ

Circular

• Launch Date for the Enhancements of Volatility Control Mechanism (“VCM”) and Pre-Opening Session (“POS”) 
• Practice Session for Volatility Control Mechanism (“VCM”) and Pre-Market Opening Session (“POS”) of the Derivatives Market
• Enhancements for Volatility Control Mechanism (“VCM”) and Pre-Market Opening Session (“POS”) of the Derivatives Market
• Reminder for the Effective Date for the Extension of Volatility Control Mechanism (“VCM”) and Dynamic Price Banding (“DPB”) Mechanism to Hang Seng TECH Index (“HTI”) Futures