TRADING VENUES

HKEX ends 2016 with record futures activity

Hong Kong has seen record year for derivatives trading activity.

By Hayley McDowell hayley.mcdowell@strategic-i.com January 09, 2017 11:13 AM GMT

Hong Kong Exchanges and Clearing (HKEX) has reported an ‘outstanding’ performance in the region’s derivatives market, with several new records reached in trading activity.

Futures contracts traded in 2016 surged 14% from 73 million the year prior to over 84 million, a new record for the exchange.

Open interest of various products across the business also reached record highs in 2016, with RMB currency futures USD/CNH doubling from 262,000 in 2015 to 539,000.

HKEX described the overall performance of derivatives, including futures and options traded at the venue in 2016, as ‘outstanding’.

The annual derivatives performance follows news of HKEX’s decision to introduce a circuit breaker into the market as of 16 January this year.

The mechanism triggers cooling-off periods if there are attempts to trade futures contracts at a price more than 5% away from its last traded price within five minutes.

HKEX said the mechanism is “designed to prevent extreme price volatility arising from trading incidents (such as a "flash crash" or bad algorithms) and is being implemented after extensive consultation with market participants.”

In securities, HKEX saw 126 new listings in 2016 as its IPO fundraising reached over USD $25 billion, making Hong Kong the leading exchange for IPO’s for the second consecutive year.

HKEX introduced a circuit breaker to its securities market in August last year.