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HKEX Marks Fifth Anniversary of After-Hours Derivatives Trading

Market Operations
10 Apr 2018

  • After-hours derivatives trading volume increased by nearly 12 times to more than 83,000 contracts in five years since its inception in 2013
  • The after-hours session has allowed investors to react to key events such as market-moving announcements
  • Eighty-five per cent of HKFE Participants now use the after-hours session

 

The After-hours Trading Session (T+1 Session), an additional derivatives trading session introduced by Hong Kong Exchanges and Clearing Limited (HKEX) in April 2013, has proved to be effective and useful to market participants as it marks its fifth anniversary.

Over the past five years, HKEX observed that the T+1 Session’s importance to the market increased significantly, with trading volume up almost 12 times from the initial levels to more than 83,000 contracts1.  The market data also show that the session’s volume rose from about 4 per cent of the day trading volume in 20132 to about 20 per cent so far this year1.

The T+1 Session was designed to provide risk management and trading tools to the market to enable investors to respond to key local and overseas news after HKEX’s day trading hours.

The T+1 Session coincided with a number of key events overseas in the past five years.  Recently, equity index futures reached record high after-hours volume of 184,397 contracts on 6 February 2018, and rose to 41 per cent of day trading volume on 14 February 2018, respectively.  Both were good days for the US’s S&P500 Index.  The USD/CNH Futures3, HKEX’s flagship Renminbi Futures product, had record high after-hours volume of 6,049 contracts, or 60 per cent of day trading volume, on 29 March 2018.

Currently, 85 per cent of Hong Kong Futures Exchange (HKFE) Participants (153 out of 180) are participating in the T+1 Session.

“We are pleased to see positive market feedback towards the T+1 Session, which has been operating smoothly and orderly since its launch five years ago, said Roger Lee, HKEX’s Joint Chief Operating Officer and Head of Markets. “Enhancing after-hours trading is a major market structure initiative for HKEX this year as we continue to make our derivatives market more competitive.” 

To further improve the after-hours trading infrastructure, HKEX in 2017 launched a three-phase enhancement plan to the T+1 Session. The first phase of the enhancement, which extended the trading hours for equity index futures to 1 am, was rolled out smoothly on 6 November 2017.  Meanwhile, details of the inclusion of equity index options in the T+1 Session, as part of the second phase of the enhancement, will be announced in due course.

The following are the T+1 Session changes that were introduced/are to be introduced:

Launch Date

Initiatives

8 Apr 2013

Launch of the T+1 Session

6 Jan 2014

Included Mini-Hang Seng Index Futures, Mini-Hang Seng China Enterprises Index Futures and extend block trade facility

7 Apr 2014

Included the first currency futures

3 Nov 2014

Extended equity index and currency futures trading hours from 11:00 pm to 11:45 pm

1 Dec 2014

Included commodity futures

30 May 2016

Included four additional currency futures in the T+1 Session

28 Jun 2017

Invited market views on T+1 enhancements

10 Jul 2017

Include gold futures

11 Aug 2017

Announced the three-phase enhancement

6 Nov 2017

Extend the trading hours of equity index futures from 11:45 pm to 1:00 am the next day (Phase 1 of the enhancements)

13 Nov 2017

Included iron ore futures

14 May 2018 (tentative)

Include equity index options (Phase 2 of the enhancements)

4Q 2018 (tentative)

Extend the trading hours of equity index and currency futures from 1:00 am to 3:00 am (Phase 3 of the enhancements)

 

1 Data up to 6 April 2018

2 Data from 8 April 2013 to the end of 2013

3 US dollar/Offshore Renminbi Futures

 

 

Ends

Updated 06 May 2020