Options Education

Introduction

There are two main types of options listed on HKEx, namely Index Options and Stock Options. Stock Options is the most traded exchange-traded derivative products after years of development. HKEx is one of the top exchanges in Stock Options trading (in terms of volume) according to figures from World Federation of Exchanges. The average daily volume (ADV) of Stock Options exceeds 270,000 contracts, indicating an increase of over 16 times when compared to ADV in 2002 and outperforming the increase in turnover in cash market in the same period, which is 11 times. For index options, ADV of standard HSI and HHI option contracts exceed 28,000 and 33,000 respectively.

One of the factors for the rapid growth of options trading volume is the increasing need for risk management. Some active participants, including investment banks and hedge funds, in Over-The-Counter (OTC) options market would like to migrate their OTC options trade to listed market to lower counter party risk after the financial tsunami in 2008. Hence the demand on exchange-traded options increases substantially.

 

Option tools and education information

Plenty of options information and tools can be found on Stock Options Corner. Stock Options Search, Options Calculator, and Portfolio Analyser are the most popular tools on the corner.

 

Stock Options Mobile App

HKEx rolled out Stock Options Mobile App in response to increasing popularity of smart phones and tablets. Investors can closely understand stock options market and track their portfolio through the mobile app. Please download the app at App Store or Google Play by search the keyword “HKEx”.

 

Tailor-Made Combination (TMC)

Tailor-Made Combination (TMC) is a new trading function provided by the Genium INET Platform* to execute option strategies. The new TMC function covers Futures and Options of Hang Seng Index, Mini-Hang Seng Index, H-Shares Index as well as Single Stock Options.

TMC is also expected to bring narrower spread on option strategy construction. Investors and traders not only can make combination trades more efficiently with execution certainty¹, trading option strategies can attain more efficient use of capital as compared to single-leg strategies².

¹ The whole combination is executed if matched successfully, no partial matching will be done
² Individual Client Account required

 

Advantages

• One Net Price
  Users can create combinations with up to FOUR legs and place orders with one net price
• Auto-Matching
  TMC orders will be ranked and matched by HKATS automatically according to price / time priority
• Quote Request
  Users can send quote requests for a TMC
  
• Versatile Facility for Rollover & Hedging
  Rollover and hedging can be done more easily and efficiently
• Certainty of Execution
  Option strategy order will be executed only if all legs are simultaneously executed with no risk of any failed legs

Trading strategies involving combination of index futures and options or roll-over activities during month end can now be executed through TMC function conveniently.

Download Tailor-Made Combination (TMC) Guide Sheet

 

Investors Education

HKEx held over 40 seminars and workshops for the public and industry practitioners in 2013 with over 3600 attendees. In addition, the Exchange has also held a large scale educational event, ETF and Stock Options Expo, with over 2500 people attended. HKEx has held more than 30 seminars in 2014, up to September. More than 3500 people attended these seminars. Investors education is important and therefore HKEx regularly hold seminars and activities for the public with brokerage firms. Investors please note different promotion activities from brokerage firms and access HKEx website for most updated information.

Download links:
http://www.hkex.com.hk/eng/prod/drprod/so/sopublications.htm
http://www.hkex.com.hk/eng/stat/dmstat/markhub/markreport.htm

 

The above information is provided by HKEx