Saxo Bank has announced a new initiative that will grant its clients access to Mini-Hang Seng Index (HSI) Options, fortifying an already robust array of options investments, according to a company statement.
Saxo Bank – a Danish online investment bank – offers a variety of financial services and access to myriad exchanges, trading platforms, institutions and brokerages. After making a splash earlier this month in the ranks of its institutional division, the bank has opted for an extension of options exposure. Its comprehensive foreign exchange and options suite affords many advantages to traders across several mediums, with its new Hong Kong targeted ambition reiterating this trend.
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Introduced in 2002 to complement futures, the Hong Kong Futures Exchange launched its Mini-HSI option contracts program to provide a condensed version of the greater Hang Seng Index. The Mini-HSI options are ideally suited for retail investors, as they absorb the advantages of larger HSI futures and options contracts, coupled with mitigated levels of risk capital. Furthermore, the smaller contract size grants both novice and experienced investors participation in the unilateral fortunes of the index itself.
According to Patrice Henault, Saxo Bank’s Futures and Options Product Manager in a recent statement, “The options will let clients leverage directional plays with a known loss potential on the index, trade volatility plays and hedge portfolios of Hong Kong stocks. It will also generate revenue enhancement on your Hong Kong portfolio writing options against a portfolio and keeping the premium.”
Indeed, clients of the service are eligible to engage in trading hours during both the morning and afternoon sessions (9:45 a.m. to 12:30 p.m. followed by 2:30 p.m. to 4:15 p.m. respectively) – as recently as January 9, 2014, Saxo Bank instituted a European-style cash settled options payment in an attempt to arbitrate trades. According to Saxo Bank, options have a contract multiplier of 10 times the index, with four contract months tradable.