Hong Kong Stock Exchange

Hong Kong stock exchange introduces HSI Volatility Index

Hong Kong Exchanges & Clearing (HKEx), Hong Kong’s stock market, this week started selling the first futures tracking volatility in Asia reported Bloomberg. Futures on the HSI Volatility Index (VHSI), which tracks expected equity market volatility over a 30-day period, are the first of their kind to be based on an Asian market according to Calvin Tai, head of trading at HKEx. The Osaka Securities Exchange Co. will also begin selling futures on Japan’s Nikkei Stock Average Volatility Index (VNKY) on 27 February according to the bourse. These derivatives have been trading in the US and Europe for several years and have definitely been something missing from the product suite in Asia in the opinion of Shane Miller, head of flow index trading for Asia Pacific at Barclays Capital. Miller was quoted as saying: “For the more professional investors, who would normally trade variance swaps, this give them another way to invest in volatility. The product will allow less sophisticated investors holding portfolios of cash or stocks to implement a hedge they didn’t previously have access to.” Tai thinks that institutional investors would be the first to enter the market.  

 

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