Hong Kong Exchanges and Clearing (HKEx) has said it will extend the range of synthetic futures available on its platform, following their initial introduction on 9 May.
From 13 June, HKEx will offer synthetic futures in five additional stock option classes comprising: Agricultural Bank of China; Bank of China; Industrial and Commercial Bank of China; iShares FTSE A50 China Index exchange-traded fund and PetroChina
“Following the smooth introduction of synthetic futures trading in the first half of May, we will offer series in five additional very actively traded stock option classes from mid-June,” said Calvin Tai, head of trading at HKEx. “We are optimistic about synthetic futures and their long-term prospects.”
A synthetic futures strategy is a stock option combination consisting of two option legs. A buyer of synthetic futures purchases a call option and sells a put option with the same underlying stock, strike price and expiry date, whereas the seller of synthetic futures sells a call option and buys a put option with the same features.
HKEx said it launched synthetic options to help investors manage delta exposure in stock options portfolios and reduce their capital outlays in options-related trading.
The current batch of stock option classes with synthetic futures series comprises China Construction Bank, China Life, China Mobile, HKEx and HSBC.