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Hang Seng China Enterprises Index Options

Hang Seng China Enterprises Index Options

Introduction

There has been growing investors' interest in China-related securities resulting from the rapid expansion of Mainland economy.  The Hang Seng China Enterprises Index (HSCEI) is a market capitalisation-weighted stock index which is compiled and calculated by Hang Seng Indexes Company Limited .  The HSCEI tracks the performance of major H-shares.  H-shares are Renminbi-denominated shares issued by People's Republic of China (PRC) issuers under PRC law and listed on the Stock Exchange of Hong Kong, the par values of which are denominated in Renminbi, and which are subscribed for and traded in Hong Kong dollars. 

The latest list of constituent stocks and compilation methodology are available on the website of Hang Seng Indexes Company Limited at   http://www.hsi.com.hk

Hang Seng China Enterprises Index 

Following the immediate success of the HSCEI Index futures, the HSCEI Index options were introduced in 14 June 2004.  On 8 February 2010, Flexible Index Options with flexibility in setting strike prices and expiry months were introduced to facilitate the booking of customized over-the-counter option contracts.

Advantages of Trading HSCEI Index Futures and Options

Flexible Trading Strategies

  • HSCEI Futures and Options provide opportunities for long or short strategies.  Besides, investors can use HSCEI Futures and Options as hedging strategies (to protect the HSCEI portfolios against a declining market) or spreading strategies (to profit from the relative performance of two markets, e.g. HSCEI Vs HSI). 

Fast Execution

  • A cost-effective way to track and establish broad market exposure linked to the performance of H-share companies.

Efficient Use of Capital

  • HSCEI Futures and Options are traded on a margin basis.  The capital outlay is much less than buying a H-share companies portfolio.

Low Transaction Costs

  • The transaction costs for trading HSCEI Futures and Options are lower than trading a basket of constituents in HSCEI.

Clearing House Guarantee

  • Futures and Options contracts are registered, cleared and guaranteed by HKEx's Clearing House, eliminating counter-party risk.  (The Clearing House guarantee does not cover a Clearing Participant's obligations to its clients.  Investors should exercise due care and diligence when deciding through whom they will conduct business.)



Updated 24 Oct 2023


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Contract Summary

Hang Seng China Enterprises Index Options 

 

Item Standard Options Flexible Options
Underlying Index                  Hang Seng China Enterprises Index
HKATS Code  HHI XHH
Contract Multiplier  HK$50 per index point
Minimum Fluctuation  One index point
Contract Months    Short-dated Options:-
Spot, next three calendar months & next three calendar quarter months

Long-dated Options:-
the next three months of June & December and the following 3 December months
Any calendar month not further out than the longest term of expiry months that are available for trading
Exercise Style European Style
Option Premium Quoted in whole index points
 Strike Prices
 Index Points Strike Interval 
 Short-dated Options:
 ≥ 20,000  200
 ≥ 5,000 and < 20,000  100
 < 5,000  50
 Long-dated Options:
 ≥ 20,000  400
  ≥ 5,000 and < 20,000  200
  < 5,000  100
 
Trading Hours 

For standard Index Options:  9:15 am - 12:00 noon, 1:00 pm - 4:30 pm & 5:15 pm  - 3:00 am
(Expiring contract month closes at 4:00 pm on the Expiry Day)

For Flexible Index Options:  9:15 am - 12:00 noon & 1:00 pm - 4:30 pm
No request of series creation is acceptable within the last 30 minutes before market close
(Expiring contract month closes at 4:00 pm on the Expiry Day)           
Expiry Day  The Second last Trading Day of the Contract Month
Official Settlement Price The average of quotations of Hang Seng China Enterprises Index taken at (i) five (5) minute intervals from five (5) minutes after the start of, and up to five (5) minutes before the end of, the Continuous Trading Session of SEHK; and (ii) the close of trading on SEHK on the Expiry Day
Transaction Costs    Exchange Fee                HK$3.50
Commission Levy             HK$0.54
   Commission Rate             Negotiable

Please visit “Rules, Regulations and Procedures of the Futures Exchange” under “Rules and Regulations” of the HKEx website for full contract specifications.


Flexible Index Option

Creation, Execution, Clearing and Settlement of Flexible Index Options

List of Exchange Participants with Flexible Index Options Trading Access

Updated 16 Sep 2017

Margin Table

Trading Fees and Commission

Exchange Fee
HK$3.50 per contract per side
Commission Levy
HK$0.54 per contract per side
Investor Compensation Levy*
HK$0.00 per contract per side
Total
HK$4.04 per contract per side
Commission
Negotiable
* The amount indicated above is subject to change from time to time.

List of Market Makers or Liquidity Providers

Equity Index Products

There are liquidity provider and 3 types of market makers in the equity index products market:

- Primary Market Maker (PMM); and

- Market maker providing continuous quotes (CQMM); and

- Market maker responding to quote request (QRMM). 

For the details of the obligations and incentives of liquidity providers and market makers, please refer webpage.

Below is the list of Short Code for EP of Liquidity Provider, PMM, CQMM and QRMM:

 
Market Makers / Liquidity Providers
BNP CFT CTD DAI FLW GHF IBG IMC JST KGI MPF NHA NHT OPT ORN SGS SQH YKR
Hang Seng China Enterprises Index Futures Options PMD PMD PMD PMD PMD CMD
Hang Seng Index Futures Options PMD PMD PMD PMD PMD CMD
Hang Seng Index Options CMD PMD CMD SMW SMD PMD SMW CMD PMD
Hang Seng TECH Index Futures Options PMD PMD PMD PMD CMD
Hang Seng Tech Index Options CMD PMD PMD PMD PMD CMD
HHI Options CMD PMD CMD SMW SMD PMD SMW CMD PMD
HSCEI Dividend Point Index Futures CMD
HSI Dividend Point Index Futures CMD
MCH Options CMD CMD CMW CMD CMD CMW CMD
MHI Options CMD CMD CMW CMD CMD CMW CMD
MSCI AC Asia ex Japan Net Total Return Index Futures CLD CLW
MSCI China A 50 Connect (USD) Index Futures CLN CLD CLD CLW CLW CLD CLD CLW CLW
MSCI China Net Total Return (USD) Index Futures CLD CLD CLD CLN
MSCI EM Asia Net Total Return (USD) Index Futures CLD CLD CLW
MSCI Emerging Markets Net Total Return (USD) Index Futures CLD CLD
MSCI Hong Kong Net Total Return (USD) Index Futures CLD CLD CLD
MSCI India (USD) Index Futures CLW CLD CLW
MSCI India Net Total Return (USD) Index Futures CLD CLD CLW
MSCI Indonesia Net Total Return (USD) Index Futures CLD CLD
MSCI Japan Net Total Return (USD) Index Futures CLD CLD
MSCI Malaysia Net Total Return (USD) Index Futures CLD CLD
MSCI Philippines Net Total Return (USD) Index Futures CLD CLD
MSCI Taiwan (USD) Index Futures CLW CLW CLD CLD CLD
MSCI Taiwan 25/50 (USD) Index Futures CLD
MSCI Taiwan Net Total Return (USD) Index Futures CLD CLD CLW
MSCI Thailand Net Total Return (USD) Index Futures CLD CLD
Weekly HHI Options CMD CMW CMD CMD CMW CMD
Weekly HSI Options CMD CMD CMW CMD CMD CMW CMD CMD
Weekly HTI Options CLD CLD CLD CLD CLD

C – Denotes providing continuous quotes
Q – Denotes responding to quote requests
P – Denotes Primary Market Maker providing continuous quotes and responding to quote requests
S – Denotes combination of C, Q and P

M – Denotes Market Maker
L – Denotes Liquidity Provider
B – Denotes both Market Maker and Liquidity Provider

D – Denotes T Session
N – Denotes T+1 Session
W – Denotes Both T and T+1 Sessions

Market Making/Liquidity providing obligations and Incentives

For details of the Market Making/Liquidity Providing Obligations and Incentives of Equity Index Products, please refer our webpage below:

https://www.hkex.com.hk/Products/Listed-Derivatives/Market-Maker-Program/Market-Maker-Obligations-and-Incentives?sc_lang=en