This will provide investors with more risk management and trading strategy options. Currently, the Hong Kong Stock Exchange's weekly Hang Seng Index options are one of the fastest growing derivatives, with an average daily trading volume of nearly 3 times higher than in 2019. “HKEx will strive to enrich its product portfolio and promote market development to further strengthen Hong Kong's position as a leading derivatives trading and risk management hub in Asia,” said Lo Po-yan, head of the securities product development department at the Hong Kong Stock Exchange.

According to information, after regulatory approval and market preparations, these 10 weekly stock option products are scheduled to be launched at the end of 2024.

It is proposed to launch a weekly contract for 10 stock options

On May 8, the Hong Kong Stock Exchange announced that it will launch 10 weekly stock options contracts. In addition to the current monthly contract, current and next week's contracts will be added, which will provide investors with more risk management and trading strategy options.

Lo Bo-yan said, “We are happy to introduce weekly stock options products later this year to further enhance the attractiveness of the Hong Kong derivatives market and provide more product options to help investors effectively manage risk. HKEx will strive to enrich its product portfolio and promote market development to further strengthen Hong Kong's position as Asia's leading derivatives trading and risk management hub.”

According to information, these 10 stocks include HSBC Holdings, Hong Kong Stock Exchange, Tencent Holdings, Kuaishou Technology, BYD, Ping An of China, Meituan, JD, Baidu, and Alibaba. They are all representative listed companies on the Hong Kong Stock Exchange. They are also active individual stocks, covering internet platforms, finance, new energy, etc.

Active trading in the derivatives market

In recent years, the derivatives market on the Hong Kong Stock Exchange has been active. The average daily turnover in 2023 was 1.35 million contracts, an increase of 4% over the previous year; the upward trend continued in 2024, with an average daily turnover of more than 1.5 million contracts in the first quarter.

With the introduction of weekly stock options, contract types have been added to the existing monthly stock option contracts, which allow investors to risk manage their positions based on short-term or specific events (such as quarterly reports, annual reports, etc.) to meet investors' trading and risk management needs. Also, since the expiration time of each cycle option contract is shorter, the option premium is also relatively low.

In 2019, the Hong Kong Stock Exchange introduced weekly Hang Seng Index options and Hang Seng China Enterprise Index options. Since its launch, weekly index options have become one of the fastest-growing product categories. Among them, the weekly average daily turnover of Hang Seng Index options jumped from 3,380 contracts in 2019 to 12,948 contracts in 2023. The average daily turnover increased threefold, accounting for about 31% of the total volume of the entire Hang Seng Index options product line.

The Hong Kong Stock Exchange said that the newly introduced weekly stock options will complement weekly Hang Seng Index options and Hang Seng China Enterprise Index options. Pending regulatory approval and market preparations, these 10 weekly stock option products are scheduled to be launched at the end of 2024.

edit/emily