Business· Markets

HKEx introduces weekly index options to boost trading

minutes 2019/08/08 10:21:12

Aug 08, 2019 (China Knowledge) - Hong Kong Exchanges and Clearing (HKEx) announces to introduce plain options contracts that expire weekly. These contracts are based on the Hang Seng Index and Hang Seng China Enterprises Index from September 16. This will be its third new structured product this year.

These two options contracts reportedly aim to manage positions in response to short-term or specific events like relatively low option premium. Considering the recent situation of HKEx, the new products could help keep Hong Kong's stock market and IPO situation remain resilient and continue to be competitive, said the Financial Secretary Paul Chan.

HKEx has launched US dollar-denominated “mini” futures for six base metals and in-line warrants several days before. These products are introduced after HKEX chief executive announced the three-year strategic program, which could decentralize the exchange's reliance on stock trading and bring new assets classes into trading.

HKEx states that those two options contracts will help improve investors' trading needs and optimize their risk management capabilities, as the amount of stock market's trading turnover and funds raised by IPOs is decreasing. Since June, two big companies' IPOs have been canceled for commercial reasons, which estimate to worth USD 11.04 billion. Funds raised by IPOs in the first seven months of the year fell 30% compared with last year. 

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