The ETF is the only mainland security on which options trading exists, with regulators allowing the China A50 ETF contracts in early 2015. The volume has grown steadily, options trading on China A50 ETF jumped to record hedge sought in April this year.
China's cabinet said earlier that financial derivatives should be developed in a "steady and orderly manner". Regulators are taking steps at their own pace to develop the required market mechanism and to test the water with options first before rebuilding the futures market.
While keeping an eye on the changing market development, domestic and international institutional investors have taken an active approach to enhance their trading capability, and be ready when the Chinese options market launches. Itiviti recently interviewed a few tier-1 brokerage and trading firms about their business challenges and opportunities in China. In summary, a long-term vision, competent teams and take advantage of advanced trading technology is key to achieve better performance. Watch the videos and learn from their experience.