Technical Problems in Hong Kong’s Exchange Brings Derivatives Trading to a Halt

Technical issues in Hong Kong halt derivatives trading.

The trading came to halt at the time when the announcement for the removal of the extradition bill was made.It was mainly due to some connectivity issues.

The Derivatives trading was stopped by the exchange operators due to technical problems for the very first time ever as reported by Bloomberg. This has happened amidst escalated sensitivity about Hong Kong’s status as the financial hub of Asia.

The Hong Kong exchange and clearing Ltd. suspended trading in the afternoon and post-market hours. It noticed connectivity problems with the derivatives platform on 5th morning. There was also intermittent access issues on their website.

A software problem in the vendor-supplied trading system halted the trading.

Hong Kong Derivatives TRading come to a halt after technical problems arise
Source : Bloomberg

The halt caused stocks to lose value. A decline of 1% seen for the MSCI Hong Kong Index.IT declined further because of the derivatives trading halt.


Martin Wong, head of exchange-traded solutions in the Asia Pacific for the equity derivatives team at BNP Paribas SA  said, “I’ve been doing this since 2003 and I don’t recall anything like this.”He also said, “Because the futures market is closed, there is no efficient way to hedge.”


The contracts for the Hang Seng Index totalled 60,070 for September before the halt. It declined by 80% when compared with the previous day.


The 20-day average of the volumes in call and put options suggested that trading for the same dropped by 5%.

Steven Leung, executive director at UOB Kay Hian (Hong Kong) Ltd said, “It’s very troublesome for investors as we can’t hedge.” He also said, “If something unexpected happened this afternoon, basically we are unable to respond effectively.”

Written by

Sourabh Jain

Last updated on

September 6th 2019, 11:29 am

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