Hong Kong bourse plans to start zero-day options trading in 2026
[MUMBAI] Hong Kong's stock exchange is seeking to launch options that expire within a day as early as the first half of 2026, bringing to the Asian hub an instrument that has driven a boom in US derivatives in recent years.
Hong Kong Exchanges & Clearing (HKEX) is planning to start offering so-called 'zero-days to expiry' contracts on the Hang Seng Index, according to sources familiar with the matter who asked not to be named because the matter is private. The bourse has been consulting with market participants and the feedback has been positive, they added.
A HKEX representative said the exchange will communicate any updates to its product offerings to the market.
Known as 0DTE contracts, the derivatives were introduced in the US in 2022 and accounted for more than half of the total S&P 500 Index options volume by the last quarter of 2024.
At a panel last week, HKEX's managing director and head of equities product development said there's been 'great demand' for shorter-dated contracts, adding that the bourse wants to replicate the success seen in the world's largest equities market.
HKEX, whose quarterly profit rose to a record amid a surge in stock trading and new listings, has been expanding its options offerings. It launched weekly contracts on the Hang Seng Tech Index in September and on 10 single stocks in November.
Derivatives trading in Hong Kong started strong this year, and interest in the world's top initial public offering was high.
On its trading debut last week, Contemporary Amperex Technology Co Limited options volume surpassed that of the city's biggest listings in the past decade, with weeklies set to start on Jun 2. BLOOMBERG
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
8 hours ago
- Business Times
Sustainable investors hold their ground as energy, defence stocks surge
[SINGAPORE] Regional wars, tariff threats and the US' pro-fossil fuel policies have sent defence and energy stocks soaring in 2025, but not all is lost for investors committed to sustainable and responsible investing, experts told The Business Times. Markets were closed on Jun 22, when US President Donald Trump ordered an attack on Iranian nuclear sites, but investors are bracing for a further spike in oil prices and rush to safe havens. The S&P 500 Energy sector index had risen 8.56 per cent month on month as at Jun 20, compared with the S&P 500's 2.11 per cent month-on-month gain. In Asia, several energy stocks rose after Israel launched air strikes on Iran on Jun 13, sending Brent futures up by US$5 to US$74 per barrel. Singapore-listed energy players such as Rex International and RH PetroGas surged more than 6 per cent at market open on Jun 16 after the strikes. The MSCI World Aerospace and Defense Index had an even larger surge, and was up 33.45 per cent year-to-date as at May 31. Comparatively, the MSCI World Socially Responsible Investment (SRI) Index has underperformed, rising 3.26 per cent year-to-date as at May 30, 2025, compared with the MSCI World index's 5.18 per cent year-to-date increase. A NEWSLETTER FOR YOU Friday, 12.30 pm ESG Insights An exclusive weekly report on the latest environmental, social and governance issues. Sign Up Sign Up More than half (56 per cent) of global investors believe that Trump's pro-fossil fuels and anti-clean energy agenda will slow the net-zero transition, indicated asset management firm Robeco's fifth annual Global Climate Investing Survey 2025 released on Jun 3, 2025. 'Clearly, the world is currently facing a tremendous amount of uncertainty, which affects both companies and investors,' Jane Wadia, London-based head of sustainability for core products and clients at AXA Investment Managers (AXA IM), told BT. US tariffs will disrupt the global trade system, she said, 'which has implications for sustainability due to the strain on supply chains'. She added: 'As a result, it may become more challenging for businesses to source materials and finance long-term projects that contribute to their sustainability efforts.' Even so, sustainability investing experts like Wadia are not too worried about the underperformance of sustainable funds or environmental, social and governance (ESG)-integrated strategies in light of these geopolitical and policy-driven uncertainties. 'We continue to see significant progress in the transition to net zero. A recent report from the International Energy Agency suggests that more than one in four cars sold globally in 2025 will be electric,' she said. 'The cost of renewable energy is falling relative to oil and gas in the long term, while demand for electricity is rising, driven by the ongoing development in China and the growth of artificial intelligence and data centres.' Despite news headlines about the ESG backlash, the undercurrents of companies' continued commitment to the energy transition and emissions reduction are still 'quite positive', said Louise Dudley, Federated Hermes' portfolio manager for global equities, who also leads ESG and responsible investment research strategy. 'We are still continuing to see opportunities around the world.' Federated Hermes managed US$839.8 billion in assets as at Mar 31, 2025. The 'green-hushing' phenomenon – where companies are removing climate goals and Web pages from the public eye but are still committed to sustainable agendas – is still alive and well, she said in an interview with BT. In addition, some of the underperforming funds could have been those that 'went quite high-risk, quite concentrated', she said, adding: 'Those types of thematic funds will have periods of underperformance as well as periods of outperformance.' A fund that is less thematic and more diversified is likely to be more resilient in the long term, she added. 'Maybe you don't get the excitement of 'Oh, we're 6 per cent ahead', but when some of these thematic trends, such as inflation, interest rates and all those things (come into play), we'll be well positioned on that,' she noted. At the core of it, measuring ESG factors is a form of risk management, she added. 'Governance, we always feel, is the backbone (of a firm), where, if a company is doing well from a governance perspective, it's going to do well… because it's going to be thinking about the right kind of risk; and it has the right people in place to manage whatever environment they go into,' she said. Responsible energy and defence investments The rise in energy and defence stocks is not necessarily incompatible with sustainable investing either, said Lucian Peppelenbos, climate and biodiversity strategist at Robeco, which had US$222 billion in assets under management and advice, of which US$216 billion is managed in ESG-integrated assets, as at December 2024. 'Within energy stocks, there are companies seriously transitioning; and also in many cases, for example, where gas replaces coal, we can see it as a sustainable transition investment,' said Peppelenbos, who is based in Amsterdam, said in an interview with BT. For instance, Norwegian oil and gas company Aker BP, which is listed on the Oslo Stock Exchange with a market capitalisation of 176.59 billion kroner (S$22.49 billion) has been viewed as an energy business with strong transition commitments, a relatively clean eco-footprint and strong fundamentals. Several other, more well-known global names such as Exxon Mobil and Royal Dutch Shell have diversified into alternative energy sources to varying degrees, although some – such as British Petroleum (BP) – have rolled back their commitments to transition away from fossil fuels. When it comes to defence stocks, Robeco makes sure there is no exposure to controversial weapons – which is against the law, as Peppelenbos reminded – and the firm calls defence investments 'responsible investing' over 'sustainable investing'. Robeco considers controversial weapons to include cluster munitions, anti-personnel mines, white phosphorus and depleted uranium ammunition, along with chemical, biological and nuclear weapons. Most of these are banned under international treaties. '(Within) exposure to defence stocks more generally, for example, there are more cybersecurity-related defence stocks that are very well compatible within ESG-integrated strategies,' he said. For instance, a high-profile incident last year where Northern Korean hackers were accused of allegedly stealing over US$1 billion worth of cryptocurrency highlights how modern warfare has evolved beyond conventional wars to cyberwars. Peppelenbos also believes that ESG is a performance driver; and because sustainability risks 'can be and often are financially material', integrating those risks makes for better informed investment decisions to help risk-adjusted returns, he said. 'Our research shows, for example, that among companies across high emission sectors and low emission sectors, companies that have good transition plans in terms of climate change – meaning targets that are in line with how their sector should decarbonise over time and are reflected in a credible transition plan – those companies are outperforming the climate laggers in their sector. So that's clearly a piece of evidence where sustainability and performance can actually go hand in hand,' he added. One underappreciated aspect of clean energy is that it plays a crucial role in future geopolitical stability as conflicts historically often arise over food, resources and energy, Ulrik Fugmann, co-head of environmental strategies group at the BNP Paribas Asset Management, told BT. Clean energy solutions and environment infrastructure is growing across Asia, Europe and the US at unprecedented speed and scale, he said. This is because of its cost-competitiveness and ability to readily tackle an urgent need to address global power deficits that are accelerated by the progress in artificial intelligence and data centres, said Fugmann, who is based in London. The asset manager has 602 billion euros (S$892.9 billion) in assets under management, of which 418 billion euros is in ESG assets. 'Given recent years' rise in inflation, interest rates and uncertain policy environment that is now getting re-enforced in the US and Europe, the clean energy sector today trades at valuation levels not seen since the great financial crisis in 2008 and depths of the Covid-19 crisis – in sharp contrast to global markets and elevated valuations in the technology sector trading at all-time highs,' he said. 'The case for sustainable solutions in clean energy has rarely been this attractive – both from a top-down macro-economic perspective and bottom-up valuation point of view,' he added.
Business Times
16 hours ago
- Business Times
Investors brace for oil price spike, rush to havens after US bombs Iran nuclear sites
A U.S. attack on Iranian nuclear sites could lead to a knee-jerk reaction in global markets when they reopen, sending oil prices higher and triggering a rush to safety, investors said, as they assessed how the latest escalation of tensions would ripple through the global economy. The attack, which was announced by President Donald Trump on social media site Truth Social, deepens U.S. involvement in the Middle East conflict. That was the question going into the weekend, when investors were mulling a host of different market scenarios. In the immediate aftermath of the announcement, they expected the U.S. involvement was likely to cause a selloff in equities and a possible bid for the dollar and other safe-haven assets when trading begins, but also said much uncertainty about the course of the conflict remained. Trump called the attack 'a spectacular military success' in a televised address to the nation and said Iran's 'key nuclear enrichment facilities have been completely and totally obliterated'. He said the U.S. military could go after other targets in Iran if the country did not agree to peace. 'I think the markets are going to be initially alarmed, and I think oil will open higher,' said Mark Spindel, chief investment officer at Potomac River Capital. 'We don't have any damage assessment and that will take some time. Even though he has described this as 'done', we're engaged. What comes next?' Spindel said. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'I think the uncertainty is going to blanket the markets, as now Americans everywhere are going to be exposed. It's going to raise uncertainty and volatility, particularly in oil,' he added. Spindel, however, said there was time to digest the news before markets open and said he was making arrangements to talk to other market participants. Oil prices, inflation A key concern for markets would center around the potential impact of the developments in the Middle East on oil prices and thus on inflation. A rise in inflation could dampen consumer confidence and lessen the chance of near-term interest rate cuts. 'This adds a complicated new layer of risk that we'll have to consider and pay attention to,' said Jack Ablin, chief investment officer of Cresset Capital. 'This is definitely going to have an impact on energy prices and potentially on inflation as well.' While global benchmark Brent crude futures have risen as much as 18% since June 10, hitting a near five-month high of $79.04 on Thursday, the S&P 500 has been little changed, following an initial drop when Israel launched its attacks on Iran on June 13. Before the U.S. attack on Saturday, analysts at Oxford Economics modeled three scenarios, including a de-escalation of the conflict, a complete shutdown in Iranian oil production and a closure of the Strait of Hormuz, 'each with increasingly large impacts on global oil prices.' In the most severe case, global oil prices jump to around $130 per barrel, driving U.S. inflation near 6% by the end of this year, Oxford said in the note. 'Although the price shock inevitably dampens consumer spending because of the hit to real incomes, the scale of the rise in inflation and concerns about the potential for second-round inflation effects likely ruin any chance of rate cuts in the U.S. this year,' Oxford said in the note, which was published before the U.S. strikes. In comments after the announcement on Saturday, Jamie Cox, managing partner at Harris Financial Group, agreed oil prices would likely spike on the initial news. But Cox said he expected prices to likely level in a few days as the attacks could lead Iran to seek a peace deal with Israel and the United States. 'With this demonstration of force and total annihilation of its nuclear capabilities, they've lost all of their leverage and will likely hit the escape button to a peace deal,' Cox said. Economists warn that a dramatic rise in oil prices could damage a global economy already strained by Trump's tariffs. Still, any pullback in equities might be fleeting, history suggests. During past prominent instances of Middle East tensions coming to a boil, including the 2003 Iraq invasion and the 2019 attacks on Saudi oil facilities, stocks initially languished but soon recovered to trade higher in the months ahead. On average, the S&P 500 slipped 0.3% in the three weeks following the start of conflict, but was 2.3% higher on average two months following the conflict, according to data from Wedbush Securities and CapIQ Pro. Dollar woes An escalation in the conflict could have mixed implications for the U.S. dollar, which has tumbled this year amid worries over diminished U.S. exceptionalism. In the event of U.S. direct engagement in the Iran-Israel war, the dollar could initially benefit from a safety bid, analysts said. 'Do we see a flight to safety? That would signal yields going lower and the dollar getting stronger,' said Steve Sosnick, chief market strategist at IBKR in Greenwich, Connecticut. 'It's hard to imagine stocks not reacting negatively and the question is how much. It will depend on Iranian reaction and whether oil prices spike.'
Straits Times
20 hours ago
- Straits Times
Middle East tensions put investors on alert, weighing worst-case scenarios
Investors are mulling a host of different market scenarios should the US deepen its involvement in the Middle East conflict. PHOTO: BLOOMBERG NEW YORK - Investors are mulling a host of different market scenarios should the US deepen its involvement in the Middle East conflict, with the potential for ripple effects if energy prices skyrocket. They are honed in on the evolving situation between Israel and Iran, which have exchanged missile strikes, and are poised for action if the US decides to join Israel in its bombing campaign. That would likely cause an initial selloff in equities and possible safe-haven bid for the dollar on concerns US military action against Iran would send inflation higher, dampening consumer confidence and lessening the chance of near-term interest rate cuts. The move by the US to deploy B-2 bombers to Guam on June 21 has caught the attention of market participants. While the bombers could be used to deliver the 30,000-pound bombs able to destroy Iran's underground nuclear programme facilities, it is unclear whether the move is tied to Middle East events. The move 'just underscores the administration's willingness to threaten to intervene,' said Mr Mark Spindel, chief investment officer of Potomac River Capital LLC. 'I think this will help oil prices stay higher; the easy direction for them right now is up at this point,' Mr Spindel added. While US West Texas Intermediate crude prices (WTI) have climbed some 10 per cent over the past week, the S&P 500 has been little changed, following an initial drop when Israel launched its attacks. However, if attacks were to take out Iranian oil supply, 'that's when the market is going to sit up and take notice', said Mr Art Hogan, chief market strategist at B Riley Wealth. 'If you get disruption to supply of oil product on the global marketplace, that is not reflected in today's WTI price and that is where things get negative,' Mr Hogan said. The White House said on June19 that President Donald Trump would decide on US involvement in the conflict in the next two weeks. Israeli officials, however, have told the Trump administration they do not want to wait the two weeks and that Israel could act alone before the deadline is up, two sources said. Analysts at Oxford Economics modelled three scenarios, including a de-escalation in the conflict, a complete shutdown in Iranian production, and a closure of the Strait of Hormuz, 'each with increasingly large impacts on global oil prices', the firm said in a note. In the most severe case, global oil prices jump to around US$130 (S$167) per barrel, driving US inflation near 6 per cent by the end of 2025, Oxford said in the note. 'Although the price shock inevitably dampens consumer spending because of the hit to real incomes, the scale of the rise in inflation and concerns about the potential for second-round inflation effects likely ruin any chance of rate cuts in the US this year,' Oxford said in the note. Oil impact The biggest market impact from the escalating conflict has been restricted to oil, with oil prices soaring on worries that the Iran-Israel conflict could disrupt supplies. Global benchmark Brent crude futures have risen as much as 18 per cent since June 10, hitting a near five-month high of US$79.04 on June 19. The accompanying rise in investors' expectations for further near-term volatility in oil prices has outpaced the rise in volatility expectations for other major asset classes, including stocks and bonds. But other asset classes, including stocks, could still feel the knock-on effects of higher oil prices, especially if there is a larger surge in oil prices if the worst market fears of supply disruptions come true, analysts said. 'Geopolitical tensions have been mostly ignored by equities, but they are being factored into oil,' Citigroup analysts wrote in a note. 'To us, the key for equities from here will come from energy commodity pricing,' they said. Stocks unperturbed US stocks have so far weathered rising Middle East conflict with little sign of panic. A more direct U.S. involvement in the conflict could, however, spook markets, investors said. As the days pass, Potomac River Capital's Spindel said, markets have become increasingly focused on the Middle East. 'The stock market can only digest one thing at a time, and right now we're all focused on if, whether and when the US enters this conflict.' Economists warn that a dramatic rise in oil prices could damage a global economy already strained by Mr Trump's tariffs. Still, any pullback in equities might be fleeting, history suggests. During past prominent instances of Middle East tensions coming to a boil, including the 2003 Iraq invasion and the 2019 attacks on Saudi oil facilities, stocks initially languished but soon recovered to trade higher in the months ahead. On average, the S&P 500 slipped 0.3 per cent in the three weeks following the start of conflict, but was 2.3 per cent higher on average two months following the conflict, according to data from Wedbush Securities and CapIQ Pro. Dollar woes An escalation in the conflict could have mixed implications for the US dollar, which has tumbled this year amid worries over diminished US exceptionalism. In the event of US direct engagement in the Iran-Israel war, the dollar could initially benefit from a safety bid, analysts said. 'Traders are likely to worry more about the implicit erosion of the terms of trade for Europe, the UK, and Japan, rather than the economic shock to the US, a major oil producer,' Mr Thierry Wizman, Global FX & Rates Strategist at Macquarie Group, said in a note. But longer-term, the prospect of U.S.-directed 'nation-building' would probably weaken the dollar, he said. 'We recall that after the attacks of 9/11, and running through the decade-long US presence in Afghanistan and Iraq, the USD weakened,' Mr Wizman said. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
