Currently, Nikkei 225 contracts are traded on SGX's open outcry market during the regular hours and on its electronic market only during the after-hours session. From November, investors will be able to trade Nikkei 225 contracts electronically on the Exchange between 7.45 am to 10.15 am and 11.15 am to 2.30 pm Singapore time, in addition to current electronic and open outcry trading hours. Contracts traded on both the open outcry and the electronic markets are fungible.
A series of enhancements will also be introduced for SGX's electronic Nikkei 225 market. These include opening the market 10 minutes earlier and closing it 5 minutes later than the open outcry market and a 50% reduction on clearing fees for the electronic Nikkei 225 options contract. To promote electronic trading, the Exchange will waive all clearing and licensing fees for the Nikkei 225 futures and options contracts traded electronically for the first 2 weeks after launch (i.e., 1 to 14 November 2004). Following that, members and customers will enjoy a 50% rebate on clearing fees from 15 November 2004 till 31 January 2005.
In addition to the above, a two-tier minimum price fluctuation for the Nikkei 225 options contract will be introduced for both the electronic and open outcry Nikkei 225 options market. Essentially, Nikkei 225 options with a premium of 50 points or less will have a minimum price fluctuation of 1 index point (equivalent to ¥500), while options with a premium of more than 50 points will continue to have a minimum price fluctuation of 5 index points. The strike price interval of 250 index points will remain unchanged.
Electronic Market Makers have also committed to providing continuous 2-way quotes for the futures & options contracts. Further, the Exchange is providing handheld devices to SGX Locals to facilitate electronic trading from the pit.
Mr Ang Swee Tian, President of SGX, said, "With the availability of Nikkei 225 futures and options contracts on the electronic trading platform, we hope to reach out to a wider base of customers, especially those who trade derivatives products electronically and expand the usage of SGX Nikkei contracts as an effective trading and risk management instrument among global traders and investors.
SGX recognises that interest in the electronic trading of derivatives products is increasing and in response, we will be introducing more products on our electronic trading platform, SGX Quest, to meet our customers' needs. In this connection, we will be working closely with our trading community to ensure that they continue to play a critical and successful role as the Exchange moves into the next phase of its strategic development."
