HKEX confirms after-hours trading of equity index options
27 April 2018 Hong Kong
Image: Shutterstock
Hong Kong Exchanges and Clearing Limited (HKEX) will make its most actively traded equity index options available for trading in the after-hours trading (T+1 session) of its derivatives futures and options market from 14 May this year.
These index options include hang seng index (HSI) options, hang seng China enterprises index options (HSCEI) and mini-HSI options.
These three most actively traded equity index options will be included in derivatives market’s after-hours trading from 5:15 pm to 1 am.
HKEX’s new trading halt mechanism (THM) is also to be introduced to after-hours trading for these options products, as part of measures to maintain market integrity.
For market protection in the T+1 session, a THM is introduced to avoid potential extreme options price movement in the T+1 session. THM applies only to equity index options trading in the T+1 session.
THM of options is linked to trading of the corresponding futures’ spot month contract. It will be triggered if either the highest bid in the buying queue for the corresponding futures’ spot month contract reaches its upper price limit, or if the lowest ask in the selling queue for the corresponding futures’ spot month contract reaches its lower price limit.
This lower price limit is 95 percent of the futures’ last traded price in the regular trading session two.
If the THM is triggered, trading of the options is halted for the rest of the T+1 session and will resume in the following regular trading session.
In this instance, a market message will be sent to all brokers and information vendors through the general distribution channels.
These index options include hang seng index (HSI) options, hang seng China enterprises index options (HSCEI) and mini-HSI options.
These three most actively traded equity index options will be included in derivatives market’s after-hours trading from 5:15 pm to 1 am.
HKEX’s new trading halt mechanism (THM) is also to be introduced to after-hours trading for these options products, as part of measures to maintain market integrity.
For market protection in the T+1 session, a THM is introduced to avoid potential extreme options price movement in the T+1 session. THM applies only to equity index options trading in the T+1 session.
THM of options is linked to trading of the corresponding futures’ spot month contract. It will be triggered if either the highest bid in the buying queue for the corresponding futures’ spot month contract reaches its upper price limit, or if the lowest ask in the selling queue for the corresponding futures’ spot month contract reaches its lower price limit.
This lower price limit is 95 percent of the futures’ last traded price in the regular trading session two.
If the THM is triggered, trading of the options is halted for the rest of the T+1 session and will resume in the following regular trading session.
In this instance, a market message will be sent to all brokers and information vendors through the general distribution channels.
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