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Hang Seng Index Options

Hang Seng Index Futures & Options

Hang Seng Index (HSI), the benchmark of the Hong Kong stock market, is one of the best known indices in Asia and widely used by fund managers as their performance benchmark.

The HSI is a market capitalisation-weighted index (shares outstanding multiplied by stock price) of the  constituent stocks. The influence of each stock on the index's performance is directly proportional to its relative market value. Constituent stocks with higher market capitalisation will have greater impact on the index's performance than those with lower market capitalisation. The constituent stocks are grouped under Commerce and Industry, Finance, Properties and Utilities sub-indices.

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 Index Options

Following the success of HSI futures, HSI options contracts were introduced in March 1993. 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

The HSI futures and options provide investors with a set of effective instruments to manage portfolio risk and to capture index arbitrage opportunities. The popularity of Hang Seng Index futures and options has developed gradually with increasing domestic and international investors' participation.

  • Proven Markets
    HSI futures and options allow experienced and novice investors alike to participate in the performance of constituent stocks in the index. As both local and international investors regard Hang Seng Index as a time-tested benchmark for the Hong Kong equity market and yardstick of portfolio performance, these contracts are consistently used by different investors for trading and risk management purposes.
  • Cost Effective
    HSI futures and options facilitate hedging activities in a cost-effective way as these contracts are traded on a margin basis. The margin to carry an open position is only a fraction of the contracted value.
  • Low Transaction Costs
    As the total value of high-capitalisation stocks represented in each HSI futures and options contract is substantial and only one commission is charged to establish or liquidate a contract, transaction costs are low when compared to purchasing or selling the constituent stocks.
  • Clearing House Guarantee
    HSI futures and options are registered, cleared and guaranteed by the HKFE Clearing Corporation (HKCC), a wholly-owned subsidiary of the HKFE. The HKCC acts as the counter-party to all open contracts, which effectively eliminates counter-party risks between its HKCC Participants. The HKCC guarantee does not cover an HKCC 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

Item
Standard Options
Flexible Options
Underlying Index Hang Seng Index
HKATS Code HSI XHS
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 and

Long-dated Options:- the next 3 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 Price
 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 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$10.00
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 Commissions

Exchange Fee
HK$10.00 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$10.54 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
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