Reasons for Promoting the Futures Contract of USD against RMB (Hong Kong)
With the acceleration of RMB internationalization, the demand for hedging currency risks has also increased accordingly. The RMB futures contracts traded on the electronic trading platform of the Hong Kong Futures Exchange enable investors to manage their RMB exchange rate risks more conveniently, and use futures contracts to make trading strategies on the trend of RMB.
Characteristics of USD-RMB (Hong Kong) Futures Contract
First, margin trading to improve the efficiency of capital utilization; 2. Select 8 contract expiration months, and the contract period can be as long as 16 months; Third, the transaction cycle is long, covering European and American time zones; The fourth is the big hand trading mechanism, which provides flexibility for over-the-counter trading and low counterparty risk; Fifth, futures contracts with principal settlement are suitable for people who trade in RMB; Six, the contract adopts the inter-bank foreign exchange rate standard, that is, every dollar is converted into RMB (for example, every 1 dollar is converted into RMB 6.2486); Seventh, the spot exchange rate fixing price of the Hong Kong Treasury Market Association is the final settlement price.
Benefits of buying and selling USD/RMB (Hong Kong) futures
USD/RMB (Hong Kong) futures is the world's first RMB-deliverable currency futures contract. The contract is quoted in RMB, and the deposit is collected and settled. The USD/RMB (Hong Kong) futures and the increasing hedging and investment products in the offshore RMB market in Hong Kong have played a complementary role.
First, invest in the RMB money market or hedge foreign exchange risks. Investors can borrow USD/RMB (Hong Kong) futures to invest in RMB money market or hedge RMB foreign exchange risks. Since there is no restriction on the use of offshore RMB, the market can truly reflect the supply and demand of offshore RMB.
The second is the leverage effect. Futures contract trading takes margin as the entry threshold, and margin is a small part of the contract value.
The third is transparent pricing. The electronic trading platform of derivatives market of Hong Kong Futures Exchange provides a standardized and transparent trading market.
The fourth is to gather the markets of global participants. Participants in the global market, including banks, funds, proprietary trading companies and active individual traders, gather in the Hong Kong Futures Exchange to buy and sell USD/RMB (Hong Kong) futures contracts.
Fifth, the risk of opponents is low. Hong Kong Futures Clearing Co., Ltd. is a subsidiary of the Hong Kong Futures Exchange, which acts as the central counterparty of each transaction to reduce the counterparty risk of the transaction.
Sixth, market makers provide liquidity. Every trading day, the dealer will provide continuous reverse quotation to the market to improve trading liquidity.