SGX extends trading hours to 3:30pm for Nikkei

Singapore Exchange (SGX) re-launches Enhanced Mini Nikkei and USD Index Futures on Thursday to provide market makers more ‘liquidity’.

Enhancements to the Mini Nikkei Futures include a one-hour extension to the trading hours to 3.30 pm. This allows market participants to use the contract to manage their Nikkei Future exposure after the Yen Nikkei Futures market shuts at 2.30 pm, an SGX report said.

Bid-offer spreads for the Mini Nikkei Futures are also now under 5 basis points for orders of JPY50 million notional value. A total of 1,539 Mini Nikkei futures contracts were traded during the T session on Thursday.

The Mini Nikkei Futures offers a finer tick size and smaller contract multiplier than the Yen Nikkei Futures, allowing for greater price efficiency and more precise hedging, an SGX report said. It is fully fungible with the Yen Nikkei Futures at a ratio of 5-to-1 and offsetting positions in the Mini and Yen Nikkei Futures in the same contract month are net off when calculating margin requirements.

The USD Nikkei Futures contract is an alternative for traders who prefer a US dollar-based Nikkei exposure. Traders are able to trade the USD Nikkei Futures across extended hours via the mutual offset arrangement between SGX and the Chicago Mercantile Exchange. USD Nikkei open interest to date has exceeded US$530 million.

Ms. Janice Kan, Senior Vice President, Derivatives at SGX said, “The Mini Nikkei Futures and USD Nikkei Futures, as well as the recently-launched Nikkei Dividend Futures, add to our Nikkei product suite, providing market participants with alternative exposure to the Japanese equity market and strengthening SGX’s position as the premier risk management centre for Asian derivatives.”