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
• Hang Seng TECH Index Futures
• USD/CNH Futures

FAQs

Hong Kong Futures

Order Types
1. Limit Order
   An order to buy a specified product at or below a specified price, or to sell at or above a specified price.
2. Stop limit Order
   • 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.
3. 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.
4. One-cancels-the-other (OCO)
   OCO orders can be used for stop loss or stop profit. You may place both types of orders at the same time, however, only one of them will be executed and the other will be cancelled. OCO orders can help you maximize your profit as well as limit your loss.
5. Bull & Bear
   You can place a set of buy or sell position and your settle orders at the same time. You will open a long or short position, when the market has moved the predetermined index points and meet your order conditions, you positions will be settled automatically.
6. Fill or Kill (FOK)
   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.
7. Fill & Kill (FAK)
   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.
Trading
8. Why can't I place an order?
   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.
9. How can I change or cancel the order?
   Once the order is placed, the order details will be displayed in the upper part of 'order book'. If you want to change or cancel the order, please right click on the order to change or cancel.
10. Under what situation that my limit order or stop order can't be cancelled?
    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.
11. How can I know if the order has been executed?
    Once the order is executed, the order status shown in order record will be changed from 'Work' to "Traded" and the execution price and quantity will be displayed in the lower part of “order book’ as well. Besides, we will send the trade confirmation to you by email.
12. What can I do if I have outstanding orders while disconnection occurs?
    You may contact us to confirm the orders status or cancel the orders.
13. Why can't I change or delete orders on Hang Seng Index (HSI), Mini-Hang Seng Index (MHI), H-shares index (HHI) and Mini H-shares index (MCH) during the price-opening session?
    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

14. Is there any price limit up/down mechanism in the After-Hours Futures Trading Session (T+1)?
    Yes. HKEX has set the percentage for the price limit up/down at 5% in the After-Hours Trading Session(T+1).
15. What is the meaning of 5% price limit up/down Mechanism?
    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.
16. How to be treated as a day trade transaction?
    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.
17. Will the trades of HK futures executed during After-Hours Futures Trading Session (T+1) be shown in the daily statement?
    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.
18. Which days do not have T+1 Session?
    • 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
19. Do I need to convert funds into settlement currency before placing an order?
    No. You can place order even if your futures account doesn’t have settlement currency. Any currency conversion will be done for you after your order is executed.
20. What are the month codes for futures contracts?

    Jan	Feb	Mar	Apr	May	Jun
    F	G	H	J	K	M

    Jul	Aug	Sep	Oct	Nov	Dec
    N	Q	U	V	X	Z

21. What are the month codes for call options contracts?

    Jan	Feb	Mar	Apr	May	Jun
    A	B	C	D	E	F

    Jul	Aug	Sep	Oct	Nov	Dec
    G	H	I	J	K	L

22. What are the month codes for put options contracts?

    Jan	Feb	Mar	Apr	May	Jun
    M	N	O	P	Q	R

    Jul	Aug	Sep	Oct	Nov	Dec
    S	T	U	V	W	X

Funds Management
23. How to deposit funds into my futures account?
    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.
24. If I have funds in my securities account, can I transfer it to my futures account for trading?
    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.
25. How to withdraw funds from my futures account?
    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.
26. If there is insufficient settlement currency to meet the margin requirement of open positions or there is a negative balance in foreign currency in my futures account, how does currencies conversion work for me?

    If there is insufficient settlement currency to meet the margin requirement of open positions or there is a negative balance in foreign currency, we will arrange currencies conversion to cover the deficit currencies.

    When we perform the currencies conversion, MONEX BOOM will follow the "Currencies Conversion Sequence" of your securities account. MONEX BOOM will firstly sell the currencies at the top of the sequence, if exhausted, then move down to the next currency.

    To define the "Currencies Conversion Sequence", please login to your securities account, then go to the "Currencies Conversion Setting" under "Currencies Conversion" of the "Funds & Account" section.

Close out & Settlement Mechanism
27. What is the sequence for closing out position?
    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
28. What are the last trading date and the settlement method for HK index futures?
    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.
29. What is the close out deadline for physical delivery contracts?

    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.

30. What is First Notice Day?
    First Notice Day is the first day, vary by contracts and exchanges, on which notices can be issued by sellers to clearing house and by the clearing house to the buyers indicating that sellers intend to deliver the physical commodities in fulfillment of their futures contracts.
31. What is Last Trading Day?
    Last Trading Day is the final day under the rules of a futures exchange during which trading may take place in a particular futures contract. Contracts outstanding at the end of last trading day must be settled by delivery of underlying physical commodity, cash or financial instrument, depending futures contract specifications.
32. Can I hold the physical delivery contracts after close out deadline?
    No. MONEX BOOM does not provide "Physical delivery" services at the moment. If you do not close out the outstanding position before the close out deadline, MONEX BOOM will perform compulsory close out on the day after close out deadline.
Two Factor Authentication
33. How to set up two factor authentication?
    Once you successfully log in to trading system or mobile app for the first time, you will receive a one-time authentication code at the registered mobile phone number. After entering the authentication code, the built-in security device will be activated. Each time you log in thereafter, you only need to enter the login ID and password and the security device will issue a security code for authentication.
34. If I fail to receive the one-time authentication code, how can I do?
    If you fail to receive the one-time authentication code, please call our Customer Service Hotline (852) 2255 8888 during office hour (Mon – Fri, 9:00am – 6:00pm HKT).
35. If I change my mobile phone or computer, is there anything I should pay attention to?

    In addition to set up two factor authentication on your new device, it is recommended to remove the pairing on your old device.

    Mobile App: Menu>Device Security Management>Remove Device

    Trading System: File>Device Security Management>Remove Device

Futures Margin Trading Policy

1. Initial Margin

   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

   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. Margin Call

   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. Force Liquidation

   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.