In 2003, the TAIFEX added two products to its existing product line. It launched Equity Options in January, and the Taiwan 50 Futures in June, in relation to the Taiwan Stock Exchange's launch of the Taiwan 50 ETF product. In addition, the 10-Year Government Bond Futures were launched on January 2, 2004, after more than three years of study and preparation.
The annual trading volume achieved an all-time record of 31,874,934 contracts, representing an increase of over 300%, compared with 7,944,254 contracts of year 2002. The average daily trading volume of year 2003 was 128,067 contracts, representing a growth of exactly 300%, compared to 32,033 contracts of year 2002. Daily trading volume hit a new high of 387,809 contracts on December 17th, compared to the high of 53,075 contracts in 2002.
In particular, the growth of the TAIEX options is particularly strong in 2003. The average daily trading volume for the TAIEX options for 2003 was 87,229, representing a growth of more than 1,281%, compared with 6,316 contracts for 2002. And the figure grew rapidly to more than 123,000 contracts in December alone. Regarding the moth-end open interests for all TAIFEX products, the figure for January and December was 156,737 and 622,446 respectively, marking a dramatic growth.
Domestic individual traders are still the main streams at the TAIFEX market. However, the market share of institutional participants has been increased tremendously from 5 % to more than 31% since then. We believe that with the increasing liquidity and decreasing regulatory barriers, the TAIFEX is able to provide a better trading environment for all.
Regarding product development, the TAIFEX plans to launch 30-Day Commercial Paper Rate Futures in mid 2004, to further compliment the existing products. Projects of launching the Taiwan 50 Options and various commodity futures are all under evaluation.
In terms of international connection, the TAIFEX has actively participated in the activities of the Futures Industry Association (FIA), World Federation of Exchanges/International Options Market Association (WFE/IOMA), and Swiss Futures and Options Association (SFOA), as a member, and other international organizations such as the International Organization of Securities Commissions. In addition, TAIFEX entered into a memorandum of understanding with the Tokyo International Financial Futures Exchange (TIFFE) and the Chicago Board of Trade (CBOT) in June and August, respectively. The aim of the motion is to form a foundation for cooperation between the two exchanges, with a hope to further develop plans for future business alliance. Moreover, in order to facilitate the TAIEX Futures and the Mini-TAIEX Futures to be offered in the United States, the TAIFEX has submitted application for no-action letters for the two products.
