The Singapore Exchange (SGX) has announced a series of initiatives to bolster its options market, including enhancing the instruments it offers and introducing a web-based electronic trade registration system.
From 6 April, SGX will boost its existing SGX Nikkei 225 index options and SGX MSCI Taiwan index options contracts by increasing the number of tradable strikes and contract months to cover a period of up to three years. The exchange also plans to launch SGX MSCI Singapore index options to complement the existing MSCI Singapore index futures. The MSCI Singapore index futures product currently has an average daily trading volume of 15,000 contracts daily.
In addition, to support the registration of negotiated large trades, including options, SGX will launch a web-based electronic trade registration system, called Electronic Negotiated Large Trades (eNLT), which will allow contracts with finer tick sizes to be registered and cleared. According to SGX, this offers market participants, including over-the-counter players, greater flexibility to register trades and the ability to take advantage of the exchange’s regulated central counterparty clearing platform.
“Our enhanced options suite and eNLT facility are part of our longer term efforts to develop the options market,” said Janice Kan, SGX vice president and head of product development, in a statement. “We believe that the options contracts will complement our current futures offerings, and can eventually become a major growth driver of our derivatives market.”