HANG Seng Index futures traded at a healthy premium to the cash yesterday, with the October contract closing up 117 points at 9,775. The contract ended the day at a 50-point premium to the cash on a modest turnover of 14,758 contracts. November climbed 120 points to 9,785, on eight contracts dealt. Better Sino ties with the United States and Britain helped sentiment. Fundamentally, the Hong Kong cash market was helped by a big fall in North American bond yields at the end of last week. Critical to sentiment today will be what happens in North America overnight. The continuation of the downward trend in bond yields will see the cash market challenge the 12-month high of 9,797 points reached last month. W.I. Carr said that in relative terms, trading ranges in the futures during the day were tight after an initial strong opening. There was a tug-of-war at 9,800. Index options saw 1,984 lots traded with activity focused on 9,600 calls and puts. The 9,800 call strike was traded in November and December in spread trading. Open interest on Friday in October index futures was 35,229 contracts. In November, it was nine contracts and in December, it was 153 contracts. In index options, in October, there were 5,805 calls and 5,594 puts. In November, there were 87 calls and 59 puts. In December, there were 7,034 calls and 4,187 puts. Breaking through 9,800 in the cash is going to take a major surge in momentum in the cash market as a strong body of profit-takers appears to enter the fray as this level of apparent resistance is approached in trading. The stock exchange said yesterday trading in Swire Pacific A share options will begin on October 9. This is expected to be followed by trading in stock options on the shares of Hongkong Telecom and CITIC Pacific on October 23. Trading in stock options began last month. Stock option volumes regularly outstrip index options volume each day. A stock exchange spokesman said: 'The exchange will soon start considering the stocks to be added following the completion of the launch of this first batch of five stocks.'