About Stock Index Futures
Stock Index Futures has been in the QFI scheme since early May, and it is one of the few futures and options offered by the China Financial Futures Exchange (CFFEX). The following is the list of products that are available:
Stock Index futures: CSI 300, SSE 50, CSI 500, CSI 1000 (Limited to Hedge Trading for QFI)
Stock index options: CSI 300, CSI 1000 (Limited to Hedge Trading)
It is important to note that while the list of products is available for trade with immediate effect, QFIIs may only invest in stock futures for hedging purposes. This means that traders will have to submit a hedging plan and relevant supporting documents to apply for a hedging quota from CFFEX.
Additionally, while the rules and regulations are also made clear by the China Financial Futures Exchange (CFFEX), this post will clarify key terms and trends.
CSI 300 Contract Specifications
The CSI 300/CSI 500 Index, CSI1000 Contract, and SSE 50 have the following specifications:
The contract for the CSI 300 Index/CSI 500 Index and CSI1000 Index has a minimum trading margin of 8% of the contract value. The tick size is 0.2 index points and contract months are the current month, the next month, and the subsequent two quarterly months of the March, June, September, and December cycle. All contracts are cash settlements.
Trading Hours are from Monday to Friday, at these trading hours:
9:00 am – 11:30 am / 1:00 pm – 3:00 pm (Beijing time)
CSI 300/CSI 500 Index/CSI 1000 symbol/SSE 50: IF/IC/IM/IH
Index Futures Terms and Glossary
Under CFFEX’s guidelines posted on the website, the following are the definitions of key terms.
- A market order is an order without a price limit under which the trader buys or sells at the best available current market price. The market orders under which no deal is concluded will be cancelled automatically.
- A limit order is one under which the trader buys or sells at a specified or better price. In buying, only deals at or below the specified price can be reached. In selling, only deals at or above the specified price can be reached. The limit order is valid on the very day. If a no-deal agreement is reached, the order can be cancelled.
Regulations on Stock Index Futures
A QFII that trades in stock index futures must comply with procedural guidelines.
Firstly, at the end of a trading day, the value of the stock index futures contracts held by a QFII must not exceed its investment quote; and it must comply with the provisions of other applicable laws and regulations.
Subsequently, within a trading day, the amount of the stock index futures traded by a QFII (excluding square positions) must not exceed its investment quota, and it must comply with the provisions of other applicable laws and regulations.
For all the above stock index futures, a client shall be subject to a daily maximum position-opening limit of 500 lots in the same contract. Positions opened for hedging or risk management purposes are not subject to the above limit.
Recently, the number of foreign institutions that are participating in China’s capital market through the QFII scheme has increased. The monthly trading volume of the product can also be found on the CFFEX monthly report guidelines, the website also provides real time value of volumes and positions or delayed quotes.
As of October, the following diagram shows the monthly trading volumes of the index futures market.
Market News
Based on reports from the Trading Economics Shanghai Shenzhen CSI 300 Index traded at 3773 on November 23rd, increasing 3 or 0.09 percent since the previous trading session. Looking ahead, it is forecasted that the index will be priced at 3689 by the end of this quarter.
In September, CFFEX also signed a memorandum of understanding with JPX. This was to enhance cooperation in derivatives markets, and it was aimed at encouraging the use of derivative products listed on JPX and CFFEX markets for investment activities by market participants in the Chinese and Japanese markets, including trades to enhance the liquidity of ETFs listed under the Japan-China ETF Connectivity scheme*.
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Being an Overseas Intermediary of Shanghai International Energy Exchange (INE), Dalian Commodity Exchange (DCE), and Zhengzhou Commodity Exchange (ZCE), when foreign clients participate in internationalised futures contracts in these Chinese markets with us, they have direct access to trading, clearing, and settlement. Our parent company, Shanghai Orient Futures, is the largest broker in terms of aggregated volume across the five regulated exchanges in China.
Orient Futures Singapore also currently holds memberships at the Singapore Exchange (SGX), Asia Pacific Exchange (APEX), and ICE Futures Singapore (ICE SG).
We provide premium customer service at an affordable cost to all our clients. Our team will be there for you 24 hours on trading days to provide a one-stop portal for all your trades, with simple processes and an intuitive user interface that has low or near-to-zero latency.
