After-Hours Trading (AHT)

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What are the differences between the Price Limit Up/Down Mechanism and Trading Halt Mechanism?

The Price Limit Up/Down Mechanism applies to Futures Trading in T+1 Session. It would be triggered when the traded price reaches upper/lower price limit or the highest bid (lowest ask) of the buying (selling) queue reaches upper (lower) price limit, etc. When the Price Limit Up/Down Mechanism is reached, a market message would be broadcasted in HKATS. Trades within the price limit would be matched continuously.
THM applies to Options Trading in T+1 Session only. THM would be triggered only when the highest bid in the buying queue reaches the upper price limit or the lowest ask in the selling queue reaches the lower price limit. Once the Trading Halt Mechanism for an equity index option is triggered, trading of the concerned THM Exchange Contract would be suspended immediately for the remaining T+1 Session.

What are the purposes for introducing AHT?

The introduction of AHT would provide trading/hedging opportunities to investors in case there is a big event happening in the European or US market and that the client base and after-hours business would be increased. AHT could reduce the volatility in the next day’s opening as some investors would have hedged or adjusted their positions in the T+1 Session in response to news and events in the European or US time zones.

What will happen to the orders during Trading Halt?

The orders of the halted THM Exchange Contract will remain in the order book but will not be matched. EPs may amend or cancel any of their existing orders. The amendment of order during the trading halt is confined to the following:

1. Modify information in Cust and/or Info Fields
2. Change duration of validity
3. Decrease quantity

What are the products available for trading in AHT?

MSCI Taiwan (USD) Futures, MSCI Taiwan 25/50 (USD) Futures, Hang Seng Index Futures, Hang Seng China Enterprises Index Futures, Mini-Hang Seng Index Futures, Mini-Hang Seng China Enterprises Index Futures, Hang Seng Index Options, Hang Seng China Enterprises Index Options, Hang Seng Index Futures Options, Hang Seng China Enterprises Index Futures Options, Mini- Hang Seng Index Options ,Mini-Hang Seng China Enterprises Index Options , Weekly Hang Seng Index Options, Weekly Hang Seng China Enterprises Index Options, Hang Seng Index Total Return Index Futures, Hang Seng China Enterprises Index Total Return Index Futures, Hang Seng TECH Index Futures Hang Seng TECH Index Option, Hang Seng TECH Index Futures Options, CNH London Metal Mini Futures, USD London Metal Mini Futures, CNH Gold Futures, USD Gold Futures, CNH Silver Futures, USD Silver Futures, Iron Ore Futures, MSCI Vietnam (USD) Index Futures, MSCI Philippines (USD) Index Futures, MSCI China (USD) Index Futures, MSCI China A 50 Connect (USD) Index Futures, Currency Futures & MSCI Late Close Contracts #are available for trading in AHT.

# https://www.hkex.com.hk/-/media/HKEX-Market/Services/Circulars-and-Notices/Participant-and-Members-Circulars/HKFE/2022/MO_DT_282_22_e.pdf

What would be the trading hours for AHT?

2:30 p.m. to 03:00 a.m. (next day) for MTW & TWP Futures
5:15 p.m. to 03:00 a.m. (next day) for HSI/HHI/MHI/MCH/HTI Futures and Options, Weekly Options, HSI/HHI/HTI Futures Options, London Metal Mini futures, Iron Ore Futures, Gold Futures, Silver Futures, Total Return Index Futures & MVI, MPS, CHI, MCA Futures
7:15 p.m. to 03:00 a.m. (next day) for Currency Futures & Options & MSCI Late Close Contracts.^#

^#https://www.hkex.com.hk/-/media/HKEX-Market/Services/Circulars-and-Notices/Participant-and-Members-Circulars/HKFE/2022/MO_DT_282_22_e.pdf

What would be the trading arrangement for Block Trade Facility (BTF) in AHT?

The trading arrangement of BTF in AHT is the same as that in the T Session, except that:

block trade prices for futures will also be subject to the +/-5% price limit in T+1 Session; and
Special Block Trade Margin (SBTM) will be applied as usual. However, as there is no banking support during T+1 Session, any block trade and/or related trade adjustment will be rejected if there is insufficient collateral in relevant participant’s CCMS Collateral Account to satisfy the SBTM.

Is TMC allowed in AHT?

Tailor-Made Combination trades are available in AHT session for Hang Seng Index (HSI) futures and options, H-shares Index (HHI) futures and options, Mini HSI (MHI) futures and options, Mini H-shares Index (MCH) futures and options only.

Is there any plan to introduce after-hours trading for other derivatives products?

Different derivatives have been constantly introduced to after-hours trading session, including, mini futures, currency futures, commodities futures and equity index options. Subject to the market demand and market readiness, other derivatives will be considered.

Is there any plan to introduce after-hours trading for cash market?

No, there is no such plan to introduce after-hours trading for cash market and we have not seen any after-hours trading needs in the cash market.

Why would there be a price limit up/down mechanism for AHT? Would price limit mechanism be introduced in T Session as well?

We believe a price limit will provide market stabilizing effect to calm market overreaction in the T+1 Session. Major derivatives exchanges also have similar price limit arrangements in their after-hours index futures trading.

The price limit up/down mechanism is as follows.

a) No sell order of price below 95% and no buy order of price above 105% of the last traded price of the spot month contract in the T Session are allowed in the T+1 Session.

b) Trading (for all contract months) will be allowed only within the price limit range during the T+1 Session.

c) The price limit of 5% (for index futures) and 7% (for currency futures) will be reviewed if necessary.

Trading in T Session would not be subject to this price limit up/down mechanism.

Is it compulsory for EPs to participate the AHT?

It is not compulsory for EPs to participate the AHT as different EPs may have different considerations such as their clients’ trading interest and operational / resources requirements. Whether to participate in AHT is a business decision for each EP to make on its own. We anticipate that for EPs which are currently offering European or U.S. derivatives trading for their clients, AHT will be an opportunity to expand their existing business with limited operational impact.

What should be done for EPs without night desk operations?

For EPs currently without night desk operations, they may consider the needs of their clients and the potential business prospect and decide whether they will participate or only provide limited services to their clients in after-hours trading. In any event, EPs should ensure that they observe the SFC’s Code of Conduct when dealing with clients on all matters in relation to the AHT.

What is the impact to those EPs that decide not to participate?

Those EPs should assess the business opportunities in AHT and their services to be provided to their clients during the AHT. If they decide not to participate in AHT, they need to ensure that their clients are aware that they would not accept clients’ orders during and for the T+1 Session. Theymay face pressure from their clients who would like to participate in T+1 Session and they may run a risk in losing these clients too.

What should be done for EPs interested to participate AHT?

EPs which would like to participate in AHT should complete and return the AHT Participation Registration form and AHT Authorized Signatories List.
EP should ensure the contact person details on the AHT participation registration form is kept up-to-date.

What is the clearing arrangement for AHT?

Trades executed in the T+1 Session will be registered as the following Business Day’s trades, together with trades executed in the following Business Day’s T Session. The DCASS services will start at 7:30 a.m. for respective AHT products until System Input Cutoff Time.

Positions are maintained according to clearing dates and separate records are held at all times for T day and T+1 day positions. T day positions will be finalized at System Input Cutoff Time and subject to day-end margin calculation. T+1 day positions will be finalized at T+1 Session Cutoff Time. These T+1 day positions will become T day’s opening positions on the following Business Day, i.e. the T day’s positions are made up of positions created during the T Session on that Business Day plus trades / post-trades executed during the T+1 Session of the previous Business Day.

For trades executed in the T+1 Session, Participants can perform post-trades (i) up to the T+1 Session Cutoff Time; and/or (ii) from 7:30 a.m. on the next Business Day till System Input Cutoff Time. If Participants want to incorporate those trades executed in the previous T+1 Session in the calculation of mandatory intra-day variation adjustment and margin, they should complete the post-trade activities 30 minutes before market open of the corresponding products.

Remarks: For any discrepancies between this FAQ and the HKCC Rules & Operational Procedures, the HKCC Rules & Operational Procedures shall prevail.

What would be the risk management arrangement for AHT?

In the absence of a level of banking support to facilitate intra-day call capability during the T+1 Session similar to that during the T Session, the following additional risk management measures will be implemented to mitigate the counterparty risks associated with AHT.

Perform monitoring of CPs’ net capital-based position limit (CBPL) based on both the current market prices and positions at regular intervals during the T+1 Session, supplemented by ad-hoc CBPL monitoring. CPs breaching their CBPL will be requested to reduce their exposure to ensure their CBPL compliance. CPs may be disconnected from the HKEX trading system and subject to closing out action by HKEX should they fail to comply with such request or further increase their exposure.
A mandatory variation adjustment (VA) and margin call to markets (based on the morning Calculated Opening Prices (COP) or market price shortly after the market open if COP is not available) with T+1 Session will be introduced following the market open of each T Session. Unlike the current ad-hoc intra-day call which includes VA only, this mandatory call will include both VA and margin of all positions as of thirty minutes before the relevant market open of the morning trading session. The call will be issued to CPs by 10:00 a.m. and the payment shall be settled by 12:00 noon. The Calculated Opening Price is the equilibrium market price derived from the price discovery period of thirty minutes before the opening of the morning trading session.
There will be no intra-day variation adjustment or margin call during the T+1 Session.

If a set of revised margin rates will take effect on the next business day, would they be applied to today’s T+1 session and the mandatory variation adjustment (VA) and margin call at the market open of the next day?

No, the margin rates applied to today’s T session will also be applied to today’s T+1 Session and the mandatory VA and margin call at the market open of the following day. New margin rates will only take effect from the commencement of trading on the next day.

Would there be any Risk Parameter Files (RPFs) during AHT session for CPs reference?

Risk Parameter Files (RPF) are generated for AHT Capital Based Position Limit (CBPL) monitoring and will be made available for download hourly in AHT Session under normal circumstances. Please note that these RPFs are calculated based on latest market prices and are for CPs’ reference only. They may not be equivalent to the RPFs that require actual money settlement.

Users may experience slow update for broadcast BD6 in “Clearing Trades” window during the T+1 Session. What is the reason?

There are batch jobs running during the AHT hours for the trades executed in T Session, so Participants may experience delay of update for broadcast BD6 or in “Clearing Trades” window. In this case, Participants please refer to broadcast BD70 or “Company Trades” window for immediate update of execution information.

Is there any kind of order type allowed in AHT_PRE_MKT_session?

This should be the same as the normal pre-market session, i.e., no new orders can be entered but instead change (not affecting order priority)/cancel T+1 orders are allowed. Since there is no pre-opening session (auction session) for AHT so no auction order is allowed.

Would you provide a time table for trading status for HSI/HHI/MHI/MCH Futures and Options, RMB Currency Futures, London Metal Mini futures, Iron Ore Futures, Gold Futures, MSCI Asia ex Japan Index Futures & Total Return Index Futures during AHT?

The trading status and their corresponding time during AHT will follow the time table below:

For HSI/HHI/MHI/MCH/HTI Futures & Total Return Index Futures

16:30:00 CLOSE_TODAY
16:32:00 AHT_INACT_T_ORDER
16:34:00 AHT_PRE_MKT_ACT
17:14:00 AHT_NEXT_DAY
17:15:00 AHT_OPEN_PL

03:00:00 AHT_CLOSE
03:01:00 CL_CLOSE
03:15:00 DAYEND

For London Metal Mini futures & Iron Ore Futures

16:30:00 CLOSE_TODAY_E
16:32:00 AHT_INACT_T_ORDER
16:34:00 AHT_PRE_MKT_ACT
17:14:00 AHT_NEXT_DAY
17:15:00 AHT_OPEN

03:00:00 AHT_CLOSE_E
03:01:00 CL_CLOSE
03:15:00 DAYEND

For HSI/HHI/MHI/MCH/HTI Options, Gold Futures & Silver Futures

16:30:00 CLOSE_TODAY
16:32:00 AHT_INACT_T_ORDER
16:34:00 AHT_PRE_MKT_ACT
17:14:00 AHT_NEXT_DAY
17:15:00 AHT_OPEN

03:00:00 AHT_CLOSE
03:01:00 CL_CLOSE
03:15:00 DAYEND

For Currency Futures & MSCI Late Close Contracts^#

18:30:00 CLOSE_TODAY
18:32:00 AHT_INACT_T_ORDER
18:34:00 AHT_PRE_MKT_ACT
19:14:00 AHT_NEXT_DAY
19:15:00 AHT_OPEN_PL

03:00:00 AHT_CLOSE
03:01:00 CL_CLOSE
03:15:00 DAYEND

^#https://www.hkex.com.hk/-/media/HKEX-Market/Services/Circulars-and-Notices/Participant-and-Members-Circulars/HKFE/2022/MO_DT_282_22_e.pdf