SGX issues consultation paper on proposed launch of SGX Options on MSCI Singapore Index Futures contract

29 December 2008

Singapore Exchange Limited (SGX) is inviting public comments on proposed rule amendments to facilitate the launch of a new options contract – the SGX Options on MSCI Singapore Index Futures (SGO) – for trading in the Singapore Exchange Derivatives Trading Pte Ltd (SGX-DT) market.

The proposed SGO contract complements the MSCI Singapore Index Futures (SG) contract, which was launched in September 1998 and has seen its volume grow steadily since. With an average daily trading volume of nearly 19,000 contracts this year and Open Interest of close to 50,000 contracts as at end-November 2008, the SG is a liquid contract traded by the professional investment community. The introduction of the SGO contract will enhance market depth.

In today’s volatile market environment, the SGO will be an essential product for participants in the futures and warrants markets to express a view on, or hedge their exposure to, the Singapore market.

The underlying instrument of the SGO is the SG contract, traded in the SGX-DT market. The SG contract itself is based on the MSCI Singapore Free Index – a free-float adjusted, market capitalisation-weighted index representing a sampling of large, medium and small cap stocks of the Singapore securities market, compiled by Morgan Stanley Capital International (MSCI).

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