Hang Seng Index Options
Contracts Specifications

Underlying Index Hang Seng Index (Compiled, computed and disseminated by HSI Services Ltd)*
Contract Multiplier HK$50 per index point*
Contract Months (For short-dated options) spot month, the next two calendar months, the next three calendar quarterly months (March, June, September, and December) and (for long-dated options) the next two months of June and December (see Note 1)
Contracted Value Option premium multiplied by the contract multiplier
Minimum Fluctuation One index point
Position Limits Position delta for Mini-Hang Seng Index Futures, Hang Seng Index Futures and Hang Seng Index Options combined of 10,000 long or short in all Contract Months combined provided the position delta for Mini-Hang Seng Index Futures shall not at any time exceed 2,000 long or short in all Contract Months combined. For this purpose, the position delta of one Mini-Hang Seng Index Futures Contract will have a value of 0.2
Large Open Positions 500 contracts in any one series per Exchange Participant for the Exchange Participant's own behalf; and 500 contracts in any one series per each client.

(Note: On 29 August 1998 the Exchange imposed temporary measures to adopt a large open position level of 250 contracts for HSI options, in connection with prevailing market conditions. The Exchange will advise the public if these measures cease to be effective, or are made permanent. Please also contact your broker about this matter.)
Option Premium Option premium is quoted in whole index points
Cabinet Bids HK$10.00 per contract to include all applicable fees and levies
Strike Prices For short-dated options, strike prices shall be set as follows: (i) at intervals of 50 index points at strike prices below 2,000 index points; (ii) at intervals of 100 index points at strike prices at or above 2,000 index points but below 8,000 index points, and (iii) at intervals of 200 index points at strike prices at or above 8,000 index points.

For long-dated options, strike prices shall be set at approximately 5% above, at and 5% below the previous day's closing price of the HSI at the time of options introduction for trading, rounded down to the nearest multiple of 50 index points with the strike prices below 2,000 index points, 100 index points with the strike prices at or above 2,000 index points but below 8,000 index points, and 200 index points with the strike prices at or above 8,000 index points.

For both short- and long-dated options, strike prices shall be set on a temporary basis at other intervals as may from time to time be determined by the Chief Executive in consultation with the Commission or at other intervals as may from time to time be determined by the Board in consultation with the Commission. The Exchange reserves the right to introduce new strike prices at any time.

Trading Hours
(Hong Kong time)
9:45 a.m. - 12:30 p.m. (first trading session)
2:30 p.m. - 4:15 p.m. (second trading session)
Trading Hours on Expiry Day
(Hong Kong time)
9:45 a.m. - 12:30 p.m. (first trading session)
2:30 p.m. - 4:00 p.m.# (second trading session)

# The closing time shall be adjusted automatically to correspond with the closing time of the underlying cash market, as it may be set from time to time.

Trading Method Electronic order matching through the automated trading system
Exercise Style
(European)
Options may only be exercised at expiration
Settlement on Exercise Cash settlement
Expiry Day The business day immediately preceding the last business day of the contract month
Final Settlement Day Business day immediately following expiry day
Official Settlement Price The official settlement price for Hang Seng Index options shall be a number, rounded down to the nearest whole number, declared by the Clearing House and shall be the average of the quotations of the Hang Seng Index taken at five-minute intervals during the expiry day.*
Trading Fees & Levies**
(per contract per side)
Exchange Fee (which includes an HKFE development fund fee of HK$0.50) HK$10.00
Securities and Futures Commission levy HK$1.00
Compensation fund levy HK$ 0.50

Total HK$11.50
Exercise Fees** A fee of HK$10.00 will be charged by the Exchange for each option contract exercised. Option contracts not exercised shall be deemed to have expired worthless and will not be assessed an exercise fee.
Minimum Commission
(per contract per side)
Before 1 April 2003

Minimum commission will be payable on all trades and will be set at the lesser of:-

  1. 1% of the contracted value rounded up to the nearest Hong Kong dollar with a minimum of HK$30; and
  2. HK$100
Options that are designate Cabinet Bids shall not attract a Minimum Commission as they have no Contracted Value

On or after 1 April 2003

Negotiable

 

* Same as the Hang Seng Index futures contract

** Fees and levies are subject to change and investors should consult their brokers

Note 1

After the expiry day in June and December respectively, a new long-dated option with a 24 month term and three new strike prices will be introduced, e.g. one strike price which is "out-of-the-money", one strike price which is "at-the-money" and one strike price which is "in-the-money".

updated on 03/09/02

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