Last Updated on 10 February, 2024 by Trading System
Welcome to our article on Hang Seng futures trading strategies! As one of the most well-known stock indexes in Asia, the Hang Seng Index (HSI) serves as a benchmark for the performance of the Hong Kong stock market. Trading Hang Seng futures can be a lucrative opportunity for investors looking to capitalize on the movements of the HSI. In this article, we will explore some effective strategies for trading Hang Seng futures, including technical analysis, fundamental analysis, and risk management techniques. Whether you’re a seasoned trader or new to the game, we hope that these strategies will help you make informed decisions and achieve your investment goals.
Hang Seng Trading
Knowing all this, it’s not hard to understand that traders and investors choose to trade or invest in Hang Seng. Still, you might be asking yourself why you should trade Hang Seng futures in particular.
Here are some of the main benefits of trading futures (more later in the article about this also):
- Low Costs
- Long History
- High Leverage
- You May Go Short
Hang Seng Trading with HSI Futures tracks the Hang Seng Index (HSI) was introduced in 1986 by the Hong Kong Futures Exchange in response to increasing interest in the HSI.
Futures Contract (HSI) Specifications
Symbol: HIS
Point Size: HK$50
Minimum Price Fluctuation: HK$50
Trading Hours:
8:45 am – 9:15 am Pre-Market Opening
9:15 am – 12:00 noon Trading Hours
1:00 pm – 4:30 pm Trading Hours
5:15 pm – 1:00 am
Expiration Months: March, June, September, and December
Rollover takes place on the second last business day of the contract month.
Mini Hang Seng Futures
Mini Hang Seng Futures are a type of financial contract that allows investors to speculate on the price movements of the Hang Seng Index, which is the major stock index in Hong Kong. The Hang Seng Index is composed of the largest and most liquid Hong Kong stocks traded on the Hong Kong Stock Exchange. By trading Mini Hang Seng Futures, investors can get exposure to the performance of Hong Kong’s stock market without having to purchase the underlying stocks.
The mini Hang Seng Futures contract is a much smaller version of the full contract, which is based on the Hang Seng Index. The mini contract is one-tenth the size of the full contract. This means that investors can take a more focused and leveraged approach to the market without having to commit a large amount of capital.
Unlike other types of futures contracts, Mini Hang Seng Futures are traded on the Hong Kong Futures Exchange. This is a separate entity from the Hong Kong Stock Exchange and is therefore subject to different rules and regulations. Due to this, there are some unique features of this contract, such as the ability to hedge against market movements.
The Mini Hang Seng Futures contract is a great way for investors to gain access to the Hong Kong stock market with a smaller amount of capital. It also provides them with the flexibility to take a leveraged approach to the market and to hedge against movements in the underlying index.
Mini Futures Contract (MHI) Specifications
The contract specifications for the mini HSI futures contract is the same as for the regular contract, except for the following points:
• Mini Futures Contracts (MHI) are a new type of futures contract that are one-tenth the size of the front-month futures contracts.
• They are offered on most of the exchanges and provide traders with the ability to take smaller positions in the futures market.
• MHI contracts are offered for a variety of commodities, including energy, metals, grains, and livestock.
• The contracts have a minimum price fluctuation of $0.01, which is one-tenth of the original contract.
• The contracts have a minimum contract size of one contract, with each contract representing a notional value of 10 original contracts.
• The contracts have a maximum contract size of 50 contracts, with each contract representing a notional value of 500 original contracts.
• MHI contracts are traded on the same exchanges as the original front-month contracts, and offer the same advantages of liquidity and price discovery.
• The contracts are available for trading on a range of electronic trading platforms, including CME Globex, ICE Futures, and Eurex.
- The regular contract has a point value of HK$50, whereas the mini futures contract has a point value of HK$10.
- The symbol name for the mini contract is MHI
Hang Seng Trading Strategies
Do not forget to also check out our library of futures trading strategies.
Every market has its own special characteristics, but there are some traits that can be observed in many markets. One such logic that is prevalent among market indexes, is mean reversion. This holds true also for Hang Seng trading strategies.
Mean reversion trading strategies is the tendency of a market to revert to its mean, once it has made exaggerated moves in one direction. So, of the market has moved excessively to the downside, we may soon expect it to turn around. The mean reverting tendency of index markets is best used to go long by catching a falling market, due to the long term rising trend of the equity markets.
If you are interested in edges and trading strategies for the Hang Seng Market, have a look at our collection of edges and strategies for a wide range of markets!
New edges are released every month!
Hang Seng Trading Strategies are strategies used by traders to buy and sell securities on the Hang Seng Index, the main stock market index in Hong Kong. The strategy involves using a combination of technical analysis, fundamental analysis and risk management techniques to identify trading opportunities and potential profits.
Technical analysis is used to identify trends and identify buying and selling points. Technical indicators such as moving averages, support/resistance levels, and Fibonacci retracements are used to identify entry and exit points. Fundamental analysis involves studying economic and political factors to assess the company’s financial health and the outlook for the stock. Risk management techniques such as stop-losses and limit orders are used to protect against losses.
The Hang Seng Index is a broad index representing the performance of the Hong Kong stock market. It is composed of 50 of the largest and most liquid stocks in the Hong Kong Stock Exchange. The index is a good indicator of the overall performance of the Hong Kong stock market.
Traders use different strategies to try to profit from trading the Hang Seng Index. Some strategies focus on short-term trading, while others focus on long-term investing. Day traders often use technical analysis to identify buying and selling points. Long-term investors will typically use fundamental analysis to identify stocks that are likely to perform well over the long run.
Hang Seng Trading Strategies are not suitable for everyone. It is important for traders to understand the risks involved and to use risk management techniques to protect against losses. A thorough understanding of both technical and fundamental analysis is necessary to successfully trade the Hang Seng Index.
Hang Seng trading strategies and backtest
Do not forget to also check out our library of futures trading strategies.
Hang Seng Futures trading strategies and backtesting are two important elements of successful financial trading. Backtesting involves taking historical data and running simulations to test various trading strategies and see how they would have performed in the past. This can give traders a good indication of how their strategies may perform going forward.
Hang Seng Futures are a type of financial instrument that tracks the performance of the Hang Seng Index, which is a benchmark for the performance of the Hong Kong stock market. Futures contracts are agreements to buy or sell a specific asset at a future date for a pre-agreed price. Trading Hang Seng Futures can be a great way to gain exposure to the Hong Kong stock market and hedge against overall market risks.
When trading Hang Seng Futures, traders should develop a comprehensive strategy that takes into account various factors such as market trends, technical indicators, and news events. Backtesting can help traders to refine their strategies by evaluating how well they would have performed in the past. Backtesting should be done with a wide variety of scenarios and with multiple time frames to get a better sense of how the strategy would have performed in different market conditions.
Traders should also consider using stop loss and take profit orders to limit their risks and maximize their returns. By setting predetermined levels at which trades are automatically closed, traders can limit their losses and lock in profits without having to constantly monitor the markets. Additionally, risk management strategies such as diversification and hedging should also be employed to reduce overall exposure to risk.
Hang Seng Futures trading strategies and backtesting can provide a great opportunity for traders to gain exposure to the Hong Kong stock market. By carefully constructing a trading strategy and backtesting it, traders can ensure they have the best chance of success when trading Hang Seng Futures.
Hang Seng Futures and COT
Hang Seng Futures and the Commitment of Traders (COT) report are two important aspects of trading in the Hong Kong stock market. Hang Seng Futures are financial instruments that allow investors to speculate on the direction of the Hang Seng Index, which is the main benchmark index for the Hong Kong stock market. The COT report provides information on the positions held by commercial and non-commercial traders in the Hang Seng Index Futures market. This can provide valuable insight into the sentiment of the market and help investors to make more informed decisions when trading.
The COT report gives detailed information on the positions held by commercial and non-commercial traders in the Hang Seng Index Futures market. It provides a breakdown of the different types of traders and their respective positions. This report is updated weekly and can be used to gain insight into the sentiment of the market and the overall direction of the index.
The Hang Seng Index Futures market is an important component of the Hong Kong stock market. By understanding the COT report and the sentiment of the market, investors can make more informed decisions when trading Hang Seng Futures. Additionally, traders should also be aware of any news or announcements that may have an impact on the direction of the index and the sentiment of the market.
Does Hang Seng have Futures?
Does Hong Kong have futures?
What makes Hang Seng index move up and down in trading?
The HSI in Hong Kong reacts to both overnight from Wall Street and events taking place in the Asia-Pacific area approximately having the same opening hours. Since becoming a part of China the Shanghai and Shenzhen stock exchanges are having a growing impact on the daily performance of the Hong Hang Seng index. The index tends to move in tandem with the Shanghai Composite as some of its constituents are dual-listed on the mainland. The currency market connected to Hong Kong also moves the index. Macroeconomic events that affect Hong Kong and also China reflects on the HSI index.
Why should you trade Hong Kongs HSI Futures?
As with most types of futures, the Hang Seng Futures contract is a useful tool for traders who wish to hedge against price movements, as well as for those who want to adjust their portfolio allocation with the help of leverage. Here are some more advantages of the Hang Seng Futures Market:
- Low Costs – Since the Hang Seng Futures contract is traded on margin, the costs in relation to the exposure you get in the market are very low. Since futures work with leverage, the cost of commissions and fees relative to the market exposure becomes tiny
- Long History – The HSI is a market that has over 50 years of history, which has made the index popular among local as well as international investors and traders.
- High Leverage – With futures, you have inbuilt leverage, which means that you can profit greatly from even small moves in the market.
- You May Go Short – With futures contracts, you can sell short and profit from downward movements in the market.
What time does Hang Seng futures open?
| HSI Index Opening Hours | Day Session | |||
| Morning Session | Afternoon Session | |||
| Hang Seng Index Futures | 9:15 a.m.* – 12:00 noon | 1:00 p.m.* – 4:30 p.m. (1:00 p.m.* – 4:00 p.m.) |
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What is the The Hang Seng Index (HSI)
Hang Seng Index market is a market index based on the 50 largest companies in Hong Kong and is one of the most well-known Asian indexes. Hang Seng is a market capitalization- weighted index, which means that the impact each stock has on the index is proportionate to the size of the stock. Thus, a smaller stock will not influence the index as much as a larger one.
Hang Seng is broken down into the following sectors/subindexes:
- Finance
- properties
- Industry and commerce
- Utilities
Here you can find more information about the different sectors/subindexes of the Hang Seng as well as the list of stocks that currently are in the index.
What is the History of Hang Seng index?
The Hang Seng Index was introduced in 1963 in an attempt to create a “Dow Jones Index” for Hong Kong. The Index was compiled by Hang Seng Indexes Company, a subsidiary of Hang Seng Bank, which is still in charge of the index.
Today the Hang Seng Bank is the largest bank in Hong Kong by market capitalization and also manages other indexes such as:
- Hang Seng China Enterprises Index
- Hang Seng China H.financials Index
- Hang Seng China AH Index Series
- Hang Seng China A Industry Top Index
Where can I find Hang Seng Futures chart?
Here is a good chart of the Hang Seng (HSI) Futures trading chart.
Where to Find Hang Seng Futures and Index Price Data
For traders who just want to view the chart of the Hang Seng Futures market, they can do so here.
Traders who wish to import data into their trading platform will have to sign up for an external data feed. E-signal is one data provider for the Hang Seng Futures markets.
What is HS50?
How do you trade on HSI?
Where To Trade Hang Seng Futures
You trade it HKEX.
Not all American brokers offer Asian or even European markets.
However, Interactive Brokers (IB) does, and Hang Seng futures can be traded through them. IB is known for its low commissions and is a reliable broker in the trading industry.
Is there a Hong Kong ETF?
You can find more info about futures market here.
You can read more about our best trading strategies here.
FAQ
What is the Hang Seng Index (HSI) and How Does it Work?
The HSI is a major stock index in Hong Kong, tracking the performance of the largest and most liquid stocks on the Hong Kong Stock Exchange. HSI futures allow investors to speculate on its price movements. Traders and investors choose Hang Seng for its low costs, long history, high leverage, and the ability to go short.
What are the Specifications of Hang Seng Index (HSI) Futures Contracts?
HSI futures contracts have the symbol HIS, a point size of HK$50, and a minimum price fluctuation of HK$50. Trading hours include pre-market opening, regular trading hours, and after-hours trading. Expiration months are March, June, September, and December.
What Factors Influence Hang Seng Index Movements in Trading?
Hang Seng Index movements are influenced by factors like overnight movements from Wall Street, events in the Asia-Pacific region, impact from the Shanghai and Shenzhen stock exchanges, and macroeconomic events affecting Hong Kong and China.