Yahoo Finance Hong Kong stock exchange to offer weekly options based on Hang Seng Tech Index
Hong Kong Exchanges and Clearing (HKEX), the operator of the Hong Kong stock exchange, will introduce a weekly options contract based on the Hang Seng Tech Index in a move to broaden its suite of derivative products amid a slowdown in new listings and trading turnover.
Weekly Hang Seng Tech Index options will hit the market on September 2, subject to regulatory approval, HKEX said on Thursday. Another financial product - weekly stock options - is being planned for later this year, it added.
These short-dated offerings, which expire every week, will support investors' needs to "manage their positions in response to short-term risks and specific events", HKEX said.
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Weekly contracts for the tech index will be offered for the current week and the following week. HKEX will apply a marketwide 50 per cent trading fee discount on the new contracts until further notice and waive the commission levy until the end of February 2025.
The latest offering will complement weekly options contracts based on the Hang Seng Index and the Hang Seng China Enterprises Index launched in 2019. Average daily volume in those options has grown more than three times to 19,000 contracts so far this year, compared with 2020.
HKEX said its existing derivatives products based on the Hang Seng Tech Index, which tracks the 30 largest technology companies, including Tencent, Alibaba and Meituan, has been actively traded since the launch in 2020.
Average daily volume for the futures contracts has grown to more than 116,000 contracts so far this year from about 14,000 in 2021. Hang Seng Tech Index options also reached a daily volume record of 31,577 contracts on May 3.
The benchmark tech index dipped 2.7 per cent on Thursday, in line with the overall slump in Hong Kong stocks after data showed a slowdown in profits for Chinese industrial companies.
HKEX reported a 13 per cent drop in net profit for the first quarter as fewer new listings and lower turnover took a toll. Despite signs of recovery in the initial public offering business, HKEX has invested heavily in its derivatives and commodities businesses and experienced strong performance.
The derivatives market recorded an average of 1.56 million contracts a day as of the end of last month, up 13 per cent year on year.
Metal contracts trading on the London Metal Exchange (LME), a wholly owned subsidiary of HKEX, also rose 31 per cent year on year to 659,000 lots per day in the first quarter.
On Thursday, LME said it is exploring adding a warehouse in Hong Kong to meet rising demand for the physical exchange of metals between mainland China and the rest of the world.
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