Market controls

HKEX to roll out volatility control mechanism in November

11 November 2016


Hong Kong Exchanges and Clearing extended its volatility control mechanism to certain derivatives contracts beginning on Nov. 14. The mechanism, which has been in effect in the exchange's securities markets since August, is designed to prevent extreme price volatility rising from major trading errors or other unusual incidents. It will apply to the spot month and next calendar month contracts of Hang Seng Index Futures, Mini-HSI Futures, H-Shares Index Futures and Mini-HHI Futures.

"The cooling-off period in the VCM mechanism alerts the market, provides a short time window allowing market participants to reassess their strategies and positions, and helps re-establish an orderly market at times when there is abrupt and drastic price movement for the contract concerned," said Roger Lee, HKEX's head of markets.

  • MarketVoice
  • Trading