HKEX Launches Hang Seng TECH Index Futures Options and Further Enhances Existing Hang Seng TECH Index Derivatives Products

November 28, 2022 - Hong Kong Exchanges and Clearing Limited (HKEX) has announced the launch of its Hang Seng TECH Index Futures Options and several updates to its existing Hang Seng TECH Index derivatives products.

HKEX's Hang Seng TECH Index Futures Options (Options on Futures, OOF) has now begun trading, complementing the existing derivatives suite on Hang Seng indices. Investors holding an OOF can now manage their risk with reference to a futures position on HKEX, prior to the settlement of the underlying futures contract.

HKEX's OOFs were originally launched in August 2021 and have been a popular product on HKEX's derivatives market. HKEX say that the average daily volume of their OOFs, Hang Seng Index Futures Options and Hang Seng China Enterprises Index Futures Options, has reached 48,220 contracts per month, marking a significant increase from of a monthly average o f4,072 contracts in 2021. The combined open interest of HKEX's OOFs exceeded 1,119,000 contracts in November, with a notional value of US$52 billion.

A trading fee discount will be applied to the new Hang Seng TECH Index Futures Options until further notice. The SFC's commission levy of this contract will also be exempted for six months.

Wilfred Yiu, HKEX Chief Operating Officer & Co-Head of Markets

HKEX Chief Operating Officer & Co-Head of Markets Wilfred Yiu said: "The strong momentum of OOFs and Hang Seng TECH Index products is great to see, and reflects our ongoing efforts to enhance Hong Kong's position as a vibrant and connected international derivatives market. The launch of the Hang Seng TECH Index Futures Options and enhancements to the broader suite of Hang Seng TECH Index derivatives today will provide global investors even more choice and flexibility, helping them to successfully manage their portfolios and risks. HKEX is committed to continuing to build the breadth and attractiveness of Hong Kong's derivatives market, supporting the city's development as a world-class trading, investment and risk-management hub."

HKEX also announced that Hang Seng TECH Index Options are now included in the After-Hours Trading (AHT) Session. This announcement coincides with a significant increase in activity in the AHT session, in part due to global volatility. Total annual ADV in the AHT session stands at 107,191 contracts for 2022 currently, up 56% from 68,717 contracts in 2021.

Finally, HKEX has added new contract months for its Hang Seng TECH Index Futures and Hang Seng TECH Index Options (see appendix for details). These are available now, and are aimed at giving investors a more complete term structure for their trading and risk management needs. Trading of the Hang Seng TECH Index Futures has grown since its launch in 2021, with ADV rising 389% to 71,967 contracts as of 22 November 2022, an increase from 14,718 contracts in 2021.