HKEX Marks Fifth Anniversary of After-Hours Derivatives Trading

• After-hours derivatives trading volume increased by nearly 12 times to more than 83,000 contracts in five years since its inception in 2013
• The after-hours session has allowed investors to react to key events such as market-moving announcements
• Eighty-five per cent of HKFE Participants now use the after-hours session

The After-hours Trading Session (T+1 Session), an additional derivatives trading session introduced by Hong Kong Exchanges and Clearing Limited (HKEX) in April 2013, has proved to be effective and useful to market participants as it marks its fifth anniversary.

Over the past five years, HKEX observed that the T+1 Session’s importance to the market increased significantly, with trading volume up almost 12 times from the initial levels to more than 83,000 contracts¹.  The market data also show that the session’s volume rose from about 4 per cent of the day trading volume in 2013² to about 20 per cent so far this year¹.

The T+1 Session was designed to provide risk management and trading tools to the market to enable investors to respond to key local and overseas news after HKEX’s day trading hours.

The T+1 Session coincided with a number of key events overseas in the past five years.  Recently, equity index futures reached record high after-hours volume of 184,397 contracts on 6 February 2018, and rose to 41 per cent of day trading volume on 14 February 2018, respectively.  Both were good days for the US’s S&P500 Index.  The USD/CNH Futures³, HKEX’s flagship Renminbi Futures product, had record high after-hours volume of 6,049 contracts, or 60 per cent of day trading volume, on 29 March 2018.

Currently, 85 per cent of Hong Kong Futures Exchange (HKFE) Participants (153 out of 180) are participating in the T+1 Session.

“We are pleased to see positive market feedback towards the T+1 Session, which has been operating smoothly and orderly since its launch five years ago,” said Roger Lee, HKEX’s Joint Chief Operating Officer and Head of Markets. “Enhancing after-hours trading is a major market structure initiative for HKEX this year as we continue to make our derivatives market more competitive.” 

To further improve the after-hours trading infrastructure, HKEX in 2017 launched a three-phase enhancement plan to the T+1 Session. The first phase of the enhancement, which extended the trading hours for equity index futures to 1 am, was rolled out smoothly on 6 November 2017.  Meanwhile, details of the inclusion of equity index options in the T+1 Session, as part of the second phase of the enhancement, will be announced in due course.

The following are the T+1 Session changes that were introduced/are to be introduced: