China Telecom (Hong Kong) seems likely to be included in the next batch of stock options to be launched by the stock exchange, despite being listed only in October last year. Sources said China Telecom had recently been included in a group of stocks approved by the Securities and Futures Commission to have options issued against them. A new batch of stock options is expected to be launched in the next few months, as the exchange attempts to reverse the drop in investor interest in the warrant market. There are now 16 options written against stocks, with trading in HSBC Holdings options dominating turnover. Since its debut, China Telecom has consistently been one of the most actively traded stocks, prompting calls from investors and market-makers for an option to be authorised. The stock's liquidity and the fact that a significant quantity of its shares is held by the public is understood to have countered the exchange's concerns about its short trading history. Macquarie Options managing director David Stocken said: 'It's part of the Hang Seng Index, it's the fourth-largest stock by market capitalisation - it should be there.' An exchange spokesman declined to comment. The exchange has been keen to increase the number of stock options to cover all Hang Seng Index stocks but last year's market downturn postponed any expansion as some investors blamed foreign banks trading in the derivatives market for the volatility in the cash market. Since August last year, only one new stock option has been authorised - against Hongkong Electric (Holdings) in February. The exchange launched its first stock options, against HSBC and Cheung Kong (Holdings), in September 1995. In July last year, the first red chips - China Resources Enterprise and Shanghai Industrial Holdings - were added to the list.