Contract Specification

Product Name Please refer to the list of stock options
Option Types Puts and calls
Contract Size One board lot of the underlying shares
Contract Value Options premium x Contract size
Minimum Fluctuation HK $0.01
Contract Months Spot, the next two calendar months & the next two quarter months ^
Options Premium Quoted in HK dollars on a per share basis
Strike Prices Interval Group A Interval Group B #
HK$ HK$ HK$
Up to $2 $0.10 $0.10
$2 to $5 $0.20 $0.20
$5 to $10 $0.50 $0.50
$10 to $20 $1.00 $0.50
$20 to $50 $2.00 $1.00
$50 to $100 $5.00 $2.50
$100 to $200 $5.00 $2.50
$200 to $300 $10.00 $5.00
$300 to $500 $20.00 $20.00
Trading Hours 9:30am – 12:00pm & 1:00pm – 4:00pm
Expiry Day Business day immediately preceding the last business day of the contract month
Exercise Style (American) Options can be exercised at any time up to 3:00 p.m. on any trading day and including the last trading day
Settlement Physical delivery of underlying shares on exercise and settlement period are:
T + 1 (options premium, payable in full) or
T + 2 (stock transfer following exercise)

^ The Exchange may introduce a third calendar quarter month and any other longer-dated expiry month in selected stock option classes as it deems necessary.

# Interval Group B Stock Option Classes as follows:

  1. CK Hutchison Holdings Ltd
  2. China Mobile (Hong Kong) Ltd
  3. Hang Seng Bank Ltd
  4. HSBC Holdings Plc
  5. Sun Hung Kai Properties Ltd
  6. Tracker Fund HK

 

Risk of Futures and Options Trading

Risk of Futures Trading

While futures trading can make substantial profits, it can also lead to equally significant losses in a short period of time. Futures trading is only for sophisticated and more disciplined investors who can afford potential losses should he find himself on the wrong side of a market.

At the end of each trading day, your position is "marked to market", or valued according to the contract's market value at the end of the day. If the contract price moves against your view so the initial margin deposit falls below the maintenance margin level, we will normally issue a margin call. This means you will have to deposit additional money to restore the initial margin level. If you don't do this, we may liquidate your position at market. You will have to bear any loss arising from the forced liquidation.

Risk of Options Trading

Longing and shorting options are two different strategies. An option holder, who takes the long position, pays a premium to the option's writer. If performance of the underlying asset goes against the holder, his maximum loss will be limited to the premium paid.

An option writer, who takes the short position, receives a premium from the holder. In exchange, he takes up the obligation to settle the contract as specified when the holder exercises the option. If the market goes against the option writer, he may suffer a substantial loss exceeding the premium received.

Remember to evaluate your risk tolerance level before taking up a position.

Investor Education

For more details regarding the natures of the above products, you can visit the SFC’s website:
http://www.thechinfamily.hk/web/iec/en/index.html