Hong Kong Exchanges and Clearing plans to introduce flexible
equity index options in the first quarter of 2010, subject to
The exchange wants to introduce options on the Hang Seng
Index and 'H’ Shares Index, which would allow
market participants to trade customised strike prices and
expiry months, provided the contracts are bought and sold
through the block trade facility.
"The introduction of flexible index options would provide
over-the-counter market participants with an attractive
counterparty risk alternative," said the exchange. "OTC players
using exchange-traded futures contracts to hedge their OTC
option positions would realise collateral and margining
efficiencies when they book relevant positions with HKEx."
The exchange already facilitates block trading of equity
index options, but those contracts must have the same strike
prices and expiry months as exchange-traded contracts. HKEx
said the new contracts were part of an effort to "expand that
part of the market by allowing flexibility in strike prices and
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