The Taiwan Futures Exchange (TAIFEX) announces that its stock index products, single stock futures (including futures on ETFs with domestic component securities) and equity options will follow the cash market in relaxing daily price limits from 7% to 10%, starting from June 1, 2015. The expansion of daily price limits aims to improve the efficiency and competitiveness of Taiwan's futures market.
In response to the expansion on daily price limits, a new level (Group 3) of margin requirements will be added to single stock futures and equity options (excluding futures and options on ETFs), from the existing two group levels. The rates of clearing margin, maintenance margin and initial margin for Group 3 will be 15%, 15.53% and 20.25%, respectively. Margining of the remaining products will be unchanged. Investors are advised to manage their risks with caution to avoid margin calls or reaching the level of closing out trades by FCMs. A series of educational activities are held to remind investors to pay special attention when placing market orders as a result of the expansion of daily price limits.
The following table shows the updated margining group levels and rates for single stock futures and equity options.