Shenzhen Bourse Introduces Pilot For Trading Stock Options

China’s Shenzhen Stock Exchange released rules for a pilot program to trade stock options, following similar moves by the Shanghai Stock Exchange four years ago.

Effective from the date of issue, the rules stipulate trading times, the types of stocks that qualify as well as requirements for investors, according to notices from the Shenzhen bourse published Saturday. The exchange also called on qualified market makers to apply for the program.

China started the trading of equity-linked options for the first time in 2015. Back then, the country initially offered contracts for an exchange-traded fund tracking some of the country’s largest companies before it promised to expand options to individual stocks on the Shanghai Stock Exchange.

Options trading is part of the nation’s effort to lure more sophisticated investors to a $6.9 trillion market where retail investors dominate and price swings have historically been among the world’s biggest.

Last month, China Securities Regulatory Commission said it will allow the Shanghai and Shenzhen bourses to offer CSI300 ETF options, and the China Financial Futures Exchange to offer CSI300 index options as part of efforts to expand the derivatives market.

Bloomberg