After Five Years, ETF Options Are Re Expanded, Shanghai And Shenzhen 300ETF Rich Risk Management Tools Library.

In the wake of the comprehensive deepening of the reform of the capital market, a number of previously prepared policies are accelerating. In November 8th, the first expansion of the ETF option product in the past five years was finally completed. The SFC announced that it would officially launch the pilot scheme to expand the stock index options, and will approve the Shanghai and Shenzhen Stock Exchange listed Shanghai and Shenzhen 300ETF options in accordance with the procedures.

"In fact, preparations for the Shanghai and Shenzhen 300ETF options have already been in progress, and they have been ready for the launch in the first two years. The launch is expected to be more intense this year, and the market is already waiting for the expansion of ETF option products." A large Futures Company chief executive of options business told reporters in Central China.

As the person said, the market is waiting for the new stock options for a long time. On the one hand, when the market was originally only 50ETF options, the varieties that could be traded for all investors were too single and could not disperse the risk of single line transactions. On the other hand, the launch of the 300ETF rights in Shanghai and Shenzhen could be more diversified for institutional and individual investors.

At present, the stock exchange has completed the drafting of the stock option business rules and the development of the technology system. The preparation of business, technology and market is ready, and the main rules are solicited to the market. During the year, the ETF option will be formally added to another important variety.

Capacity expansion is now.

When it comes to the expansion of Shanghai and Shenzhen 300ETF options, we can not fail to mention that the good development of SSE 50ETF in recent years has laid a solid foundation for the expansion of other index options products.

As a major exploration of the domestic financial market, the Shanghai stock exchange launched 50ETF option products in February 9, 2015. After 4 and a half years, the domestic market has been the only option variety.

In the 4 and a half years after the operation of Shanghai 50ETF, the market began to become familiar with this product and reached a climax of Shanghai 50ETF products this year. Its volume and account opening amount reached a new high.

In the middle of July, the position of Shanghai 50ETF options exceeded 4 million points, and more and more funds poured into the market which has been ignored by the market. An important reason for the sharp increase in 50ETF option holdings this year is that the single product structure has been unable to meet the market demand.

"High option positions, on the one hand, reflects the gradual increase of investors' understanding of options, and the enthusiasm of participating options is getting higher and higher. 50ETF options are increasingly sought after by funds. On the other hand, it also reflects that at present, Shanghai 50ETF options can no longer satisfy investors' investment needs, and the market needs new financial options." Hongye futures options analyst said in an interview with reporters.

It can be said that with the fluctuation of the market, the demand for market investors to use the option tools to complete risk control or hedging is getting stronger and stronger. The market also has an urgent hope for the introduction of more options products.

At the same time, reporters learned that Shanghai 50ETF has another function approved by regulators since last year's sharp fluctuations in the stock market, which also provides a good regulatory environment for the follow-up product launches.

In the middle of November last year, the SFC held a symposium on responsible persons of some securities companies, and the relevant directors of the securities and Futures Commission heard the proposal of securities firms on the development of 50ETF options and related risk hedging instruments.

"If regulators begin to attach importance to options products and have a lot to do with their ability to hedge against market risks, investors do not have much choice of two-way operations, and there is no choice when they fall." For regulators, they began to understand and value the risk management function of options products, a private company in Beijing said.

To sum up, after nearly 5 years of development, Shanghai 50ETF options have gone up to a higher level, both in terms of transaction size and market maturity.

But the companies covered by SSE 50ETF are always limited, and the market also hopes that the option products can be extended to other mainstream ETF products, such as deep 100ETF or Shanghai and Shenzhen 300ETF.

"At present, the largest demand for ETF is 300ETF, because 300 of the index is the mainstream, 50 of the index is mainly concentrated in the financial sector, and 300 of the index is more balanced, so the biggest demand is 300ETF's index options products. Huang Xudong said.

As Huang Xudong said, the expansion of Shanghai and Shenzhen 300ETF options is imperative now.

Open the new world

The launch of Shanghai and Shenzhen 300ETF is not a simple expansion for the market. Compared with the Shanghai Composite Index 50, the Shanghai and Shenzhen 300 index has significant differences at many levels, which also greatly enhances the choice of market participants.

The Shanghai and Shenzhen 300 index is the core broad base index of China's A share market. The index stock market value is about 30 trillion yuan, accounting for about 60% of the total A stock market value. The asset size of the Shanghai and Shenzhen stock index 300 is over 150 billion yuan.

Specifically, the top ten weights of 50ETF are banking, securities, insurance financial stocks, and large blue chips are highly concentrated. The top ten weights of Shanghai and Shenzhen 300ETF covers a wide range of banks, consumption and insurance, while white horse blue chips are mainly concentrated, and the sample stocks are involved in the whole market.

"Shanghai and Shenzhen 300 constituent stocks are more widely distributed than the 50ETF, and the concentration is scattered; the Shanghai and Shenzhen 300 blue chip white horse has a higher degree of attention, a more active trading activity and a bigger fluctuation than the 50ETF big blue chips. The Shanghai and Shenzhen 300 shares have adjusted faster and better, and the 50ETF stocks have been stable and adjusted less. All of the 50ETF scores are in the 300 components of Shanghai and Shenzhen. The Shanghai and Shenzhen 300 has higher elasticity, the future anticipation is better, the space is bigger. In view of the opening of the stock exchange, the Shanghai and Shenzhen 300 will be more offensive in the medium and long term.

"On the whole, 50ETF accounts for 50% of big finance, 300ETF accounts for 36% of big finance, manufacturing is 32%, and 300ETF involves a wider range of industries. Investors can use options to hedge underlying stocks and industries, and also enrich the portfolio of existing markets." Song Zhejun told the twenty-first Century economic report.

Obviously, the expansion of Shanghai and Shenzhen 300ETF options with larger industry coverage will provide investors with more diversified choices. This has also given priority to many investment institutions, especially public funds and insurance institutions.

Liu Jun, chief investment officer of Huatai berry, said that the new ETF option will help diversify the investment strategy of investors, and it will also enable more investors to carry out risk management more accurately. "At present, institutional investors' positions and CSI 300 are more coincide, and the demand for risk management is bigger. Therefore, future investors' participation in the risk management of Shanghai and Shenzhen 300ETF options is more significant, richer strategy and more frequent usage scenarios, which can further enhance the liquidity of Shanghai and Shenzhen 300ETF."

Song Zhejun said: "in the long term trend, the correlation between 50ETF and 300ETF is as high as 95%, but investors can find out the most suitable one on the choice of options, and the directional traders of options tend to pay more attention to the explosive force between 50 and 300 when the opportunity comes; the target strong and weak arbitrage traders can use the difference rule between 300 and 50 to carry out the option return arbitrage; the hedges of individual stocks or portfolios can match the higher correlation and better liquidity option hedges, and also can arbitrage through the differences between the direct options of different varieties."

With the continuous deepening of the reform of the SFC, apart from the Shanghai and Shenzhen 300ETF, the market also began to expect more options products to land at an early date.

"From the market level, investors will still look forward to the listing of 500ETF options, so that the derivatives market is more perfect for hedging of all kinds of portfolios. The overall hedging of 300ETF options and 50ETF options is still aimed at hedging against big blue chips and white horse stocks, and the future 500ETF option listing will open another window, bringing the gospel to small cap stocks and portfolios." Song Zhejun told reporters.