Hong Kong’s Stock Exchange Aims to Launch USD/CNH Options in 2018
- The step effectively makes HKEX the third international house to provide exchange-traded options on the US dollar/RMB pair.
The operator of Hong Kong’s stock exchange, Hong Kong Exchanges and Clearing Limited (HKEX), is preparing to offer renminbi currency options through a USD/CNH contract in Q1 2018, amid growing demand to hedge currency risk arising from a more volatile yuan.
To unlock the Asian market, register now to the iFX EXPO in Hong Kong
The step effectively makes HKEX the third international Clearing House Clearing House A clearing house is defined as an intermediary between two parties, a buyer and seller, which helps facilitate the overall process from trade inception to settlement. Clearing houses streamline the exchange of payments, securities, or derivatives transactions.The clearing house is situated between two clearing firms who also helps reduce the risk of either member firm failing to honor their respective trade settlement obligations.Buyers and sellers enter into legally binding agreements for the e A clearing house is defined as an intermediary between two parties, a buyer and seller, which helps facilitate the overall process from trade inception to settlement. Clearing houses streamline the exchange of payments, securities, or derivatives transactions.The clearing house is situated between two clearing firms who also helps reduce the risk of either member firm failing to honor their respective trade settlement obligations.Buyers and sellers enter into legally binding agreements for the e Read this Term to provide exchange-traded options on the US dollar/offshore RMB pair, which reinforces Hong Kong’s overall position as the premier offshore renminbi centre.
The product will be based on offshore US dollar-yuan rates cleared in Hong Kong and would launch amid growing demand for tools to hedge currency risks that arise from a more volatile yuan.
The Hong Kong bourse said that the new product will allow investors to employ trading and hedging strategies for various market conditions. It would also limit counterparty risk, with HKEX acting as central clearing counterparty. In addition, the operator of the Hong Kong’s stock and futures markets will facilitate block trades and tenor coverage up to 16 months.
The new contract is a follow-up to forex products launched by the HKEX in recent months including USD/CNH futures and other RMB currency futures. The move was aimed at expanding Hong Kong bourse futures market as the country has signaled its ambition to become an offshore yuan trading canter.
Commenting on the news, Julien Martin, Head of Fixed Income and Currency Product Development, said: "RMB Currency Options are part of our efforts to provide a full range of RMB-related derivatives to take advantage of our unique opportunity to help entrench Hong Kong as a gateway for cross-border fund flows and a Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term centre in connection with the internationalisation of the RMB. The introduction of Currency Options will provide investors with a tool to execute more trading strategies.”
The operator of Hong Kong’s stock exchange, Hong Kong Exchanges and Clearing Limited (HKEX), is preparing to offer renminbi currency options through a USD/CNH contract in Q1 2018, amid growing demand to hedge currency risk arising from a more volatile yuan.
To unlock the Asian market, register now to the iFX EXPO in Hong Kong
The step effectively makes HKEX the third international Clearing House Clearing House A clearing house is defined as an intermediary between two parties, a buyer and seller, which helps facilitate the overall process from trade inception to settlement. Clearing houses streamline the exchange of payments, securities, or derivatives transactions.The clearing house is situated between two clearing firms who also helps reduce the risk of either member firm failing to honor their respective trade settlement obligations.Buyers and sellers enter into legally binding agreements for the e A clearing house is defined as an intermediary between two parties, a buyer and seller, which helps facilitate the overall process from trade inception to settlement. Clearing houses streamline the exchange of payments, securities, or derivatives transactions.The clearing house is situated between two clearing firms who also helps reduce the risk of either member firm failing to honor their respective trade settlement obligations.Buyers and sellers enter into legally binding agreements for the e Read this Term to provide exchange-traded options on the US dollar/offshore RMB pair, which reinforces Hong Kong’s overall position as the premier offshore renminbi centre.
The product will be based on offshore US dollar-yuan rates cleared in Hong Kong and would launch amid growing demand for tools to hedge currency risks that arise from a more volatile yuan.
The Hong Kong bourse said that the new product will allow investors to employ trading and hedging strategies for various market conditions. It would also limit counterparty risk, with HKEX acting as central clearing counterparty. In addition, the operator of the Hong Kong’s stock and futures markets will facilitate block trades and tenor coverage up to 16 months.
The new contract is a follow-up to forex products launched by the HKEX in recent months including USD/CNH futures and other RMB currency futures. The move was aimed at expanding Hong Kong bourse futures market as the country has signaled its ambition to become an offshore yuan trading canter.
Commenting on the news, Julien Martin, Head of Fixed Income and Currency Product Development, said: "RMB Currency Options are part of our efforts to provide a full range of RMB-related derivatives to take advantage of our unique opportunity to help entrench Hong Kong as a gateway for cross-border fund flows and a Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term centre in connection with the internationalisation of the RMB. The introduction of Currency Options will provide investors with a tool to execute more trading strategies.”