THE Hongkong Futures Exchange is considering a foreign exchange contract with options as its next product.
Exchange chief executive Gary Knight said yesterday the exchange was studying its alternatives - probably a spot contract - which would be much smaller than the US$5 million contracts available on the interbank market.
The contract would allow speculators who use leveraged deals with the small foreign exchange dealers outside regulation to trade a publicly quoted contract with reduced risk of default.
Mr Knight said the exchange was looking at offering the contracts on the usual traded currencies, although it was also considering currencies which had special links to Hongkong, such as the Australian and Canadian dollars.
He emphasised that the exchange still faced hurdles.
As well as looking at demand, it would study the economic value of the contract and the legislation regulating non-bank foreign exchange dealers being considered by Legco.