Taiwan Stock Exchange head lauds options market growth

He even expressed his hope that on a monthly basis, options trading could reach 2 percent of the total.

Schive made the remarks during a ceremony yesterday, marking the first day of trading of callable bull/bear contracts (CBBCs). Right now, there are 55 CBBCs issued by nine securities firms.

Schive said the issuance of CBBCs marked a milestone in Taiwan's securities trading, yet said the island's options market still have lots of room for growth.

In Hong Kong, options account for about 15 percent of the securities trading market, he said.

Huang Min-chu, chairman of Taiwan's securities trade association, said options will gain more popularity in the long run and may eventually account for five percent of all trading in Taiwan.

There are 30 underlying assets to which the CBBCs are linked. According to Schive, the 30 were selected based on their trade volume. The Taiwan Stock Exchange may review the underlying assets on a quarterly basis, he said.

Yesterday, trades of the CBBCs were rather tepid. Only six CBBCs saw transaction breaking 100 units during the first hour of trade.

According to Schive, people should focus more on the number of investors and trade volume, rather than on the number of CBBCs issued. “Right now options investors total about 35,000. When the number hits 70,000, the market will get hotter,” he said.

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