Mini-Hang Seng China Enterprises Index Futures - Introduction

The trading and hedging needs relating to H-shares from retail investors are growing continously.  As volatility and index level increase, the high profit and loss swing becomes a hurdle for retail investors’ participation.  A mini-Hang Seng China Enterprises Index futures would meet the needs of customers who have a smaller risk capital.

The underlying index of Mini-Hang Seng China Enterprises Index futures is the Hang Seng China Enterprises Index (HSCEI), the same as the standard HSCEI Index futures contract.  The HSCEI is a market capitalisation-weighted stock index which is compiled and calculated by Hang Seng Indexes Company Limited.  


Advantages of trading Mini-Hang Seng China Enterprises Index Futures:


Tailor-made for retail investors 
The Mini-HSCEI Index futures contracts inherit the advantages of the larger sized HSCEI Index futures contracts but are tailored for individuals with smaller risk capital. The smaller contract size allows experienced and novice investors alike to participate in the performance of the H-shares market in a graduated scale.


Transaction costs
Comission levy will be exempted for the first six months of trading of Mini-HSCEI Index futures.  No stamp duty is required for trading futures and options product.


Margin offset
The client and clearing house margin levels for HSCEI futures contract will be set at one-fifth of the respective margins for the HSCEI futures contract.  Margin offset will be applicable to the product group containing HSCEI contracts in net margined accounts, with delta/spread between the Mini-HSCEI and HSCEI contracts set at a ratio of 5 to 1.


The Mini-HSCEI futures contract and the HSCEI futures contract are fungible in that opposite positions in these two contracts can be offset at the ratio of one HSCEI Index futures contract against five Mini-HSCEI Index futures contracts.  Positions in these two exchange contracts will be netted automatically (in the case of House and Market Making Accounts) or may be closed out in accordance with the Clearing House Rules.