With the Mutual Offset arrangement, trading positions can be transferred seamlessly between SGX and CME. This creates a single marketplace around the clock, where customers only need to put up one margin for each position.
Hsieh Fu Hua, SGX CEO, said, "With this enhancement, our customers will enjoy better risk management and trading opportunities on the Japanese equity market. It will also accelerate the development of the SGX Nikkei futures market, which registered strong growth and record volumes in 2003."
The Nikkei 225 futures contract was pioneered in September 1986 by the SGX derivatives market (then SIMEX) as the world's first Japanese stock index futures. Since then, it has successfully provided trading and hedging opportunities during the Japanese stock market hours.
Currently, Nikkei futures are traded on SGX's open outcry platform, from 7.55am to 10.15am and 11.15am to 2.25pm, covering Japan's stock market trading hours. It is also traded on the SGX electronic platform from 3.30pm to 7pm.
As announced earlier, SGX plans to extend its electronic trading hours for Nikkei futures to parallel its open outcry hours. This gives customers two simultaneous platforms on SGX for trading Nikkei futures during Japan's stock market hours. This will take place after SGX implements its new derivatives trading engine in the third quarter of 2004.
