Volatility Control Mechanism (VCM)

Volatility Control Mechanism (VCM) is designed to protect the market from disorderliness caused by extreme price volatility. VCM for the derivatives market covers the spot month and next calendar month contracts in the Hang Seng Index (HSI), Mini Hang Seng Index (MHI), Hang Seng China Enterprises Index (HHI), Mini-Hang Seng China Enterprises Index (MCH) and Hang Seng TECH Index (HTI) Futures  markets (total 10 contracts).

When VCM is in effect, a five-minute cooling-off period will be triggered if the price deviates for more than 5% from the last traded price five minutes ago. This provides a window allowing market participants to reassess their strategies, if necessary.  It also helps to re-establish an orderly market during volatile market situations. After the cooling-off period, trading will resume to normal with VCM monitoring. In other words, multiple triggers per trading session is allowed.

Enhancement on Volatility Control Mechanism

• Trading Mechanism of Volatility Control Mechanism (VCM) in the Derivatives Market (Updated on 14 Oct 2022)
• Briefing Materials on Enhancements Implementation (Updated on 5 Mar 2021)
• FAQ

Circular

• Launch Date for the Enhancements of Volatility Control Mechanism (“VCM”) and Pre-Opening Session (“POS”) 
• Practice Session for Volatility Control Mechanism (“VCM”) and Pre-Market Opening Session (“POS”) of the Derivatives Market
• Enhancements for Volatility Control Mechanism (“VCM”) and Pre-Market Opening Session (“POS”) of the Derivatives Market
• Reminder for the Effective Date for the Extension of Volatility Control Mechanism (“VCM”) and Dynamic Price Banding (“DPB”) Mechanism to Hang Seng TECH Index (“HTI”) Futures

Educational Materials

• Volatility Control Mechanism ("VCM") in Derivatives Markets