The Taiwan Futures Exchange (TAIFEX) will launch its second ‘mini’ equity index futures – the Mini Electronics Sector Futures (ZEF) – on 28 June 2021 to cater for rising demand from retail investors for gaining exposure to electronics stocks, including major semiconductors, optoelectronics and electronic parts/components makers such as TSMC, Mediatek and Hon Hai Precision (Foxconn).
Amid the pandemic-driven chips shortage, Taiwan’s electronics sector has drawn significant interests from global investors. As working from home triggered the surging demand for chips, laptops and network peripherals during the outbreak of COVID-19, which further pushed up the trading value of electronics stocks to account for 70% of Taiwan’s stock market, the contract value of Electronics Sector Index Futures (TE) has doubled compared to its launch.
Complementing the larger TE contract, the contract value of ZEF is around USD 15,000, one-eighth of that of TE. The reduced contract size will facilitate a wider range of trading strategies and provide greater flexibility, while its lower margin requirement will enable further diversified portfolio allocations. ZEF is available for trading in both regular and after-hours sessions, and gives all investors a cost-efficient way to fine-tune their index exposure and versatility to manage positions.
In 2020, Mini-TAIEX Futures (MTX), TAIFEX’s first mini contract, overtook its larger-sized TAIEX Futures (TX) to become the Exchange’s most heavily-traded futures product, averaging over 310 thousand contracts traded daily in Q1 2021. With unprecedented demand for mini contracts, the Exchange expects trading volume for the new ZEF contract to rise steadily, alongside with other smaller-sized futures products.
