eFuturesHong Kong Futures
Hong Kong Futures

Introduction


Futures contract is one of the derivatives products which carries the effect of leverage. No matter whether the underlying asset is going to rise or fall, futures contracts can provide hedges, or even profit opportunities, to investors.

MONEX BOOM offers you the trading services for various futures contracts, so that you can be more flexible for executing your investment strategies and be more responsive to the fast-changing markets. The following futures contracts are available in MONEX BOOM:

  • Hang Seng Index Futures
  • Mini-Hang Seng Index Futures
  • H-shares Index Futures
  • Mini H-shares Index Futures

Margin Requirements

The margin requirements for future contracts will be adjusted from time to time according to market conditions and requirement from the exchange. For details, please refer to "Table of Margin Requirements for HK Futures Contracts".

System Download

To start trading futures contracts, please download and install the following software.

System Rquirement
CPU: Intel Core CPU or above
Memory: 3GB or above
Free Hard Disk Space: 1GB or above
NIC: 100Mbps or above
OS: Windows 7 or above
Browser: Chrome or Internet Explorer

MONEX BOOM provides futures trading services which cover the major Hong Kong indices, including Hang Seng Index Futures and H-shares Index Futures

Hang Seng Index Futures


Introduction of the index

Hang Seng Index (HSI), the benchmark of the Hong Kong stock market, is one of the best known indices in Asia and widely used by fund managers as their performance benchmark. The HSI is a market capitalisation-weighted index (shares outstanding multiplied by stock price) of the constituent stocks. The influence of each stock on the index's performance is directly proportional to its relative market value.

To learn more about the list of constituent stocks and compilation methodology of HSI, please visit the website of Hang Seng Indexes Company Limited: http://www.hsi.com.hk

Advantages

Proven Markets

Hang Seng Index Futures allow experienced and novice investors alike to participate in the performance of constituent stocks in the index. As both local and international investors regard Hang Seng Index as a time-tested benchmark for the Hong Kong equity market and yardstick of portfolio performance, these contracts are consistently used by different investors for managing portfolio risk and capturing index arbitrage opportunities.

Cost Effective

Hang Seng Index Futures facilitate hedging activities in a cost-effective way as these contracts are traded on a margin basis. The margin to carry an open position is only a fraction of the contracted value.

Low Transaction Costs

As the total value of high-capitalisation stocks represented in each Hang Seng Index Futures contract is substantial and only one commission is charged to establish or liquidate a contract, transaction costs are low when compared to purchasing or selling the constituent stocks.

Trading Hours & Contract Summary

Hang Seng Index Futures
Code
HSI
Margin Requirement
Contract Size
HK$50 x Index
Minimium Fluctuation
1 index point=HK$50
Contract Months
Spot month, the next calendar month & the next 2 calendar quarter months
Pre-Market Opening Period(Hong Kong Time)
  • 08:45-09:15 (Morning Session)
  • 12:30-13:00 (Afternoon Session)
Trading Hours (Hong Kong Time)
  • 09:15-12:00 (Morning Session)
  • 13:00-16:30 (Afternoon Session)
  • 17:15-01:00 (T+1 Session)
Last Trading Day
The business day immediately preceding the last business day of the contract Month
Trading Hours on Last Trading Day (Hong Kong Time) (Spot Month Contract)
  • 09:15-12:00 (Morning Session)
  • 13:00-16:00 (Afternoon Session)
Settlement Method
Cash settled in HKD
Final Settlement Price
Average of quotations of the Hang Seng Index taken at five minute intervals during the Last Trading Day
Mini-Hang Seng Index Futures
Code
MHI
Margin Requirement
Contract Size
HK$10 x Index
Minimium Fluctuation
1 index point=HK$10
Contract Months
Spot month, the next calendar month & the next 2 calendar quarter months
Pre-Market Opening Period(Hong Kong Time)
  • 08:45-09:15 (Morning Session)
  • 12:30-13:00 (Afternoon Session)
Trading Hours (Hong Kong Time)
  • 09:15-12:00 (Morning Session)
  • 13:00-16:30 (Afternoon Session)
  • 17:15-01:00 (T+1 Session)
Last Trading Day
The business day immediately preceding the last business day of the contract Month
Trading Hours on Last Trading Day(Hong Kong Time)(Spot Month Contract)
  • 09:15-12:00 (Morning Session)
  • 13:00-16:00 (Afternoon Session)
Settlement Method
Cash settled in HKD
Final Settlement Price
Average of quotations of the Hang Seng Index taken at five minute intervals during the Last Trading Day

H-shares Index Futures


Introduction of the index

There has been growing investors' interest in China-related securities resulting from the rapid expansion of Mainland economy. The Hang Seng China Enterprises Index (HSCEI) is a market capitalisation-weighted stock index which is compiled and calculated by Hang Seng Indexes Company Limited . The HSCEI tracks the performance of major H-shares. H-shares are Renminbi-denominated shares issued by People's Republic of China (PRC) issuers under PRC law and listed on the Stock Exchange of Hong Kong, the par values of which are denominated in Renminbi, and which are subscribed for and traded in Hong Kong dollars.

To learn more about the list of constituent stocks and compilation methodology of HSCEI, please visit the website of Hang Seng Indexes Company Limited: http://www.hsi.com.hk

Advantages

Flexible Trading Strategies


H-shares Index Futures provide opportunities for long or short strategies. Besides, investors can use H-shares Index Futures and Options as hedging strategies (to protect the HSCEI portfolios against a declining market) or spreading strategies (to profit from the relative performance of two markets, e.g. HSCEI Vs HSI).

Fast Execution


A cost-effective way to track and establish broad market exposure linked to the performance of H-share companies.

Efficient Use of Capital


H-shares Index Futures are traded on a margin basis. The capital outlay is much less than buying a H-share companies portfolio.

Low Transaction Costs


The transaction costs for trading H-shares Index Futures are lower than trading a basket of constituents in HSCEI.

Trading Hours & Contract Summary

H-shares Index Futures
Code
HHI
Margin Requirement
Contract Size
HK$50 x Index
Minimium Fluctuation
1 index point=HK$50
Contract Months
Spot month, the next calendar month & the next 2 calendar quarter months
Pre-Market Opening Period(Hong Kong Time)
  • 08:45-09:15 (Morning Session)
  • 12:30-13:00 (Afternoon Session)
Trading Hours (Hong Kong Time)
  • 09:15-12:00 (Morning Session)
  • 13:00-16:30 (Afternoon Session)
  • 17:15-01:00 (T+1 Session)
Last Trading Day
The business day immediately preceding the last business day of the contract Month
Trading Hours on Last Trading Day(Hong Kong Time)(Spot Month Contract)
  • 09:15-12:00 (Morning Session)
  • 13:00-16:00 (Afternoon Session)
Settlement Method
Cash settled in HKD
Final Settlement Price
Average of quotations of the HSCEI taken at five minute intervals during the Last Trading Day
Mini H-shares Index Futures
Code
MCH
Margin Requirement
Contract Size
HK$10 x Index
Minimium Fluctuation
1 index point=HK$10
Contract Months
Spot month, the next calendar month & the next 2 calendar quarter months
Pre-Market Opening Period(Hong Kong Time)
  • 08:45-09:15(Morning Session)
  • 12:30-13:00(Afternoon Session)
Trading Hours (Hong Kong Time)
  • 09:15-12:00(Morning Session)
  • 13:00-16:30(Afternoon Session)
  • 17:15-01:00(T+1 Session)
Last Trading Day
The business day immediately preceding the last business day of the contract Month
Trading Hours on Last Trading Day(Hong Kong Time)(Spot Month Contract)
  • 09:15-12:00(Morning Session)
  • 13:00-16:00(Afternoon Session)
Settlement Method
Cash settled in HKD
Final Settlement Price
Average of quotations of the HSCEI taken at five minute intervals during the Last Trading Day

FAQs


Hong Kong Futures

    Order Types
  1. An order to buy a specified product at or below a specified price, or to sell at or above a specified price.
    • Buy Order
      When market price is equal to or more than the stop loss price, your buy order will be sent to market.
    • Sell Order
      When market price is equal to or less than the stop loss price, your sell orders will be sent to market.
  2. An auction order. An order that does not have a price limit assigned and is ready to be matched at the Calculated Opening Price (COP) during the Pre-market Opening Period.
  3. Fill or Kill means that the order is to be matched, immediately after submission, at the exact quantity specified in the quantity field or else it will be cancelled automatically by the system at once.
  4. Fill and Kill means that the order is to be matched, immediately after submission, as much as possible, up to quantity specified in the quantity field and the remaining unmatched portion, if any, will be cancelled automatically by the system at once.
  5. Trading
  6. There are several reasons that you fail to place an order:
    • Password has expired. Our system requires clients to change their passwords regularly to ensure security. If password expired, you need to change a new password in the futures trading system.
    • Not enough purchasing power. System will hold required margin amount for all order placing request including stop orders that are not triggered no matter they have been executed or not for credit control. You can cancel some of the not-yet-executed orders request to release hold margin or increase the cash balance in your account.
    • Exceed the trading limit. There is an assigned trading limit for each online futures trading account as the maximum margin for open position. It is for credit control purpose. If your account has enough purchasing power but your order request exceeds the trading limit, it will be rejected. If you would like to adjust your trading limit amount, please contact us by phone or by email.
    • System problem on exchange or broker side. If you encounter any system problems, please contact us for further details.
  7. Once the order is placed, the order details will be displayed on 'order book'. If you want to change the order, please press the 'pencil' pattern on the left hand side of the order record, change the order details and then click 'OK' button to proceed. If you want to cancel the order, please press the 'cross' pattern on the left hand side of the order record and then click 'OK' button to proceed.
  8. As the market may fluctuate quickly, your limit order or stop order may be executed in a short time and not able to be cancelled.
  9. Once the order is executed, the order status shown in order record will be changed from 'Queuing' to “Complete” and the execution price and quantity will be displayed in the order record as well. Besides, we will send the trade confirmation to you by email.
  10. You may contact us to confirm the orders status or cancel the orders.
  11. There are regulations by HKEX on order placing of HSI, MHI, HHI and MCH futures during the pre-opening session (8:45am-9:15am and 12:30pm-1:00pm).

    • During the pre-opening periods of 8:45am-9:11am and 12:30pm-12:56pm, the exchange accepts any adding, changing or deleting of auction orders or limit orders.
    • During the pre-opening periods of 9:11am-9:13am and 12:56pm-12:58pm, the exchange accepts placing of AO orders only. No modifications or cancellation of orders are allowed.
    • During the pre-opening periods of 9:13am-9:15am and 12:58pm-1:00pm, no modifications or cancellation of active auction orders or limit orders are allowed.

    The following table displays the actions that can be done during the trading day.
    "" indicates the actions that can be performed at a particular time period.

    Limit Auction Change order Delete order
    08:45am - 09:11am
    Limit
    Auction
    Change order
    Delete order
    09:11am - 09:13am
    Limit
    Auction
    Change order
    Delete order
    09:13am - 09:15am
    Limit
    Auction
    Change order
    Delete order
    09:15am - 12:00pm
    Limit, Auction, Change order, Delete order
    Morning Market Open Session
    PS:No AO orders are allowed
    12:30pm - 12:56pm
    Limit
    Auction
    Change order
    Delete order
    12:56pm - 12:58pm
    Limit
    Auction
    Change order
    Delete order
    12:58pm - 01:00pm
    Limit
    Auction
    Change order
    Delete order
    01:00pm - 04:30pm
    Limit, Auction, Change order, Delete order
    Afternoon Market Open Session
    PS:No AO orders are allowed
  12. All the order instructions for local futures trading are valid in both T and T+1 sessions, that is, they are valid until the close of T+1 session..
  13. Yes. HKEX has set the percentage for the price limit up/down at 5% in the After-Hours Trading Session(T+1).
  14. It means no sell order of price below 95% and no buy order of price above 105% of the last traded price of the spot month contract in the T Session will be allowed. Trading (for all contract months) will be allowed only within the price limit range during the T+1 session. Moreover, trading in the T session will not be subject to this price limit up/down mechanism.

    For example: Price Limit (For HSI Futures, MHI Futures, HHI Futures & MCH Futures trading in T+1 Session only)

    Last traded price in T session
    20,000
    Buy limit
    21,000
    Sell Limit
    19,000

    You cannot place buy order above 21,000 or sell order below 19,000 for all contract months.
  15. For those positions which are opened and closed in T+1 session in previous day or in T session in current day, or they are opened and closed within the same T session or within the same T+1 session.
  16. The trades of HK futures during After-Hours Futures Trading Session (T+1) will be presented on the daily statement of the following trading day.
    • a Hong Kong public holiday; or
    • a half-day trading in the HKEX's securities market; or
    • a bank holiday in both the UK and United States; or
    • a Typhoon Signal No.8 or above or a Black Rainstorm Warning is hoisted and is not lowered before 12:00 noon
  17. Yes. You can't place order if your futures account doesn't have settlement currency. You can deposit settlement currency to your futures account directly. Alternatively, if your securities account has cash balance, you can convert it to settlement currency and transfer to futures account.
  18. Jan Feb Mar Apr May Jun
    F G H J K M

    Jul Aug Sep Oct Nov Dec
    N Q U V X Z
  19. Funds Deposit & Withdrawal
  20. You need to deposit funds to our designated bank accounts and indicate your futures account number in the deposit notification. For details, please refer to "Funds Management" page of our website.
  21. You can transfer your funds from securities account to your futures account via the funds transfer webpage in securities account during designated hours. For details, please refer to "Funds Management" page of our website.
  22. You need to transfer the funds from futures account to your securities account first and then submit a withdrawal request in your securities account. For details, please refer to "Funds Management" page of our website.
  23. 'Initial Cash Balance' + 'Deposit' – 'Withdrawal' – 'Initial Margin' – 'Realized Loss' – 'Unrealized Loss' – 'Charges'
  24. Close out & Settlement Mechanism
  25. The close out position sequence for holding more than one futures contract is as follows:
    • Intraday contract
    • The earliest opened contract
    • The contract opened on previous day
  26. The lasting trading date for HK index futures is two working days before month end. The settlement method is cash settled. The official settlement price is determined by HKEX, which is an average of index prices taken at five minute intervals over the last trading day. The final settlement price can be viewed on the HKEX website.
  27. For relative long positions, the close out deadline is either 3 trading days before the First Notice Day or Last Trading Day, whichever is earlier.

    For relative short positions, the close out deadline is 3 trading days before the Last Trading Day.

Last Update: January 2018.

Futures Margin Trading Policy


  1. When opening a position in futures contract, an investor is required to pay an initial margin, which is a deposit equivalent to a fraction of the futures contract value, to cover market price fluctuations.

    As such, you need to have sufficient purchasing power in your futures account to meet the initial margin requirement before opening new position(s).

    The purchasing power is the available balance which can be used to open new position(s). It is the equity balance minus the initial margin required for holding your open position(s) (if any).

    If you do not hold any open position, your purchasing power is equivalent to the amount of cash balance or equity balance in the futures account.

    Purchasing Power
    Equity Balance
    Cash Balance
    >=
    Initial Margin
    The amount of deposit required to open a new position in futures contract.

    When you are holding open position(s), your equity balance includes cash balance and unrealized P&L, which is the unrealized profits and losses calculated by marking-to-market open position(s). If your futures account has unrealized profits, your equity balance will be increased and vice versa.

    Purchasing Power
    Equity Balance
    Cash Balance
    +
    Unrealized Profits & Losses
    (For open positions)
    -
    Initial Margin
    (For open positions)
    The amount of deposit paid for the open position(s).
    >=
    Initial Margin
    The amount of deposit required to open a new position in futures contract.

    Examples:

    HSI Closing Open Position(s) Equity Balance
    (HKD)
    Initial Margin
    (HKD)
    Purchasing Power
    (HKD)
    Contract Name Cash Balance
    (HKD)
    Unrealized P&L
    (HKD)
    Day 1
    HSI Closing
    22500
    Open Position(s): Contract Name
    -
    Open Position(s): Cash Balance(HKD)
    $100,000
    Open Position(s): Unrealized P&L(HKD)
    -
    Equity Balance(HKD)
    $100,000
    Initial Margin(HKD)
    -
    Purchasing Power(HKD)
    $100,000
    Day 2
    HSI Closing
    22600
    Open Position(s): Contract Name
    HSI Long @22500
    Open Position(s): Cash Balance(HKD)
    $100,000
    Open Position(s): Unrealized P&L(HKD)
    +$5,000
    Equity Balance(HKD)
    $105,000
    Initial Margin(HKD)
    $74,000
    Purchasing Power(HKD)
    $31,000
    Day 3
    HSI Closing
    22700
    Open Position(s): Contract Name
    HSI Long @22500
    MHI Long @22500
    Open Position(s): Cash Balance(HKD)
    $100,000
    Open Position(s): Unrealized P&L(HKD)
    +$10,000
    +$2,000
    Equity Balance(HKD)
    $112,000
    Initial Margin(HKD)
    $74,000
    $14,800
    Purchasing Power(HKD)
    $23,200

    Day 1:

    You deposited HKD 100,000 into your futures account and did not open any position, your cash balance, equity balance and purchasing power were HKD 100,000.

    Day 2:

    Contract Name Initial Margin
    (HKD)
    Tick Value
    (HKD)
    HSI Hang Seng Index Futures $74,000 $50

    You opened a long position on Hang Seng Index Futures contract at 22500 (HSI Long @22500), which required initial margin of HKD 74,000. After paying the initial margin, your purchasing power became HKD 26,000.

    At the end of the day, HSI rose to 22600. Since HSI moved up 100 ticks from your contract price, you had HKD 5,000 unrealized profits (i.e. $50 x 100 ticks).

    Adding the unrealized profits to the cash balance, your equity balance and purchasing power became HKD 105,000 and HKD 31,000 respectively.

    Day 3:

    Contract Name Initial Margin
    (HKD)
    Tick Value
    (HKD)
    MHI Mini-Hang Seng Index Futures $14,800 $10

    You opened a long position on Mini-Hang Seng Index Futures contract at 22500 (MHI Long @22500), which required initial margin of HKD 14,800. After holding the initial margin for HSI & MHI, your purchasing power became HKD 11,200.

    At the end of the day, HSI rose to 22700. Since HSI moved up 200 ticks from your contracts price, you had HKD 10,000 unrealized profits (i.e. $50 x 200 ticks) from your long HSI contract and HKD 2,000 unrealized profits (i.e. $10 x 200 ticks) from your long MHI contract.

    Adding the unrealized profits of all your open positions to the cash balance, your equity balance and purchasing power became HKD112,000 and HKD 23,200 respectively.

    For initial margin requirement of different contracts, please refer to the Margin Requirements on our website.

  2. Maintenance margin is a minimum amount of equity required for holding the open position(s). It means that the level of your equity balance must be kept at or above the maintenance margin for your open position(s).

    Equity Balance
    Cash Balance
    +
    Unrealized Profits & Losses
    (For open positions)
    >=
    Maintenance Margin (For open positions)
    The amount of equity required for holding the open position(s).

    The maintenance margin is a portion of the initial margin and the amount will be shown in the trading system.

    If the equity balance falls below the maintenance margin, you are required to deposit additional funds or close out the futures contract position (see Point 3 below), otherwise we may force liquidate (see Point 4 below) some or all of the open positions in your futures account without prior notice.

    Important note on Maintenance Margin:

    Futures exchanges and/or our company might revise the amounts and/or impose extra loading on margin(s) from time to time. We strongly advise, when you are holding open position(s), you shall closely observe the latest Margin Requirements as listed on our website as well as the equity balance of your futures account.

  3. In intraday trading, a margin call will be initiated if your equity balance falls below the maintenance margin required for holding the open position(s).

    The margin call will be issued to you by email detailing the amount of margin top-up required, the payment deadline and any other important information associated with the call.

    You are required to meet the margin call requirements (i.e. have additional funds in your futures account no less than the demanded top-up margin payment) prior to the payment deadline as specified in the margin call.

    SPAN margin*:*

    After the market closed of each trading day, SPAN margin requirement will be calculated for the portfolio in your futures account. There could be a situation that even if your account satisfies the margin requirement during the trading day, it could still subject to margin call after the SPAN computation.

    * SPAN margin is a margin requirement calculated by standardized portfolio analysis of risk. It is based on a sophisticated set of algorithms that determine margin according to a total portfolio assessment of the one-day risk.

    To meet the margin call, you can
    • Deposit additional funds: to deposit funds into your futures account, please refer to the "Funds Management" section.
      Important Notes
      • Cheques are not accepted as a form of settlement for margin call.
      • After topping-up for margin, you shall notify us immediately and provide proof of deposit. We will then confirm receipt of such notification with you.
      • From a standpoint of risks, deposits will not be considered as margin top-up until it has been confirmed by bank and credited into your futures account. Please pay attention to and manage the risks involved.
    • Transfer funds from another BOOM account: to transfer funds into your futures account, please refer to the "Funds Management" section.
      Important Notes
      • Services will not be available on Hong Kong public holidays.
    • Reduce exposure: close out some or all of your open position(s), or hedge the positions with spread strategy#.
      # Example:
      If you have a long position on Nov HSI contract, you may short one Dec HSI contract for hedging the risk of the long position.
  4. If you fail to meet the margin call (see Point 3 above) before the deadline specified in the call, or if in any circumstances, your margin level (i.e. the ratio between equity balance and initial margin) falls to or below 50%, we have full rights to force liquidate some or all of the open position(s) in your futures account without prior notice.

    Important note on Force Liquidation:
    • We do not guarantee force liquidation, or the promptness of the liquidation. Force liquidation is a means of mitigation in market condition that is against your position (s) and it does not prevent over-loss from happening in your futures account. If the amount from force liquidation is insufficient to cover the outstanding balance, you will remain liable for the outstanding amount. We have the right to combine your Futures account with any other account(s) maintained with us in order to set off , transfer or apply funds or other assets in such account(s) in satisfaction of your liabilities in Futures account.
    • Notification of any force liquidation will be given to you by email.

Last Update﹕January 2018.