THE Hong Kong Futures Exchange is linking up with the Philadelphia Stock Exchange to trade currency options.
Under the first deal of its kind in the territory, the Hong Kong futures exchange will trade the Philadelphia stock exchange currency options in Asian trading hours.
The initiative is intended to spearhead the Hong Kong exchange's plan to build a foreign exchange business. The launch of rolling foreign currency contracts in the year is part of the plan.
Futures exchange chief executive Ivers Riley said: 'We are excited at the prospect of trading one of the world's most successful exchange-based products.' In 1982, the Philadelphia exchange developed the world's first currency options product and was now the world's largest physically settled currency options market place, said a spokesman.
Philadelphia exchange president Nicholas Giordano said: 'This linkage represents a breakthrough in the ability of the US markets to effectively serve a growing Asia and Pacific Rim customer base, utilising an established institution in that time zone.' The Philadelphia exchange trades currency options 12 hours a day. The launch of United Currency Option Market (UCOM) last year increased the exchange's capability in currency options trading.
UCOM allows the trading of standardised contracts and also offers a facility for users to create customised currency option transactions, including the use of 72 currency pairs, specific strike exercises or strike prices, the choice of premium payment and flexible expiration dates.