Sweden’s Orc Trading has teamed up with Galaxy Futures, a Chinese broker, to offer access to China’s nascent options market.
“The cooperation with Galaxy combines Orc’s global experience in helping participants establish their derivatives trading business with Galaxy’s local Chinese market know-how, ensuring a straight forward process for customers looking to start trading into China,” said Greg Chambers, president of Orc’s Asia-Pacific division.
In February the Shanghai Stock Exchange began offering options based on a single exchange traded fund, the SSE China 50 ETF. This contract is the first option contract available for trading on a Chinese exchange. Several others are in the pipeline, however. The China Financial Futures Exchange, which introduced stock index futures in 2010, is seeking regulatory permission to launch stock index options and has begun mock trading sessions to help the market prepare.
Orc and Galaxy are offering their customers a chance to participate in these sessions, and Chambers says it is giving traders a chance to build their familiarity with the new product before its launch.
So far, over a dozen companies have participated in the SSE China 50 ETF option trading or the simulation competitions, according to officials at Galaxy. The firm has trading and clearing licenses for all four of China’s major domestic futures exchanges. Its parent companies are China Galaxy Financial Holding Company Ltd and Royal Bank of Scotland. Orc serves 200 customers in more than 30 countries, and offers access to over 150 markets.
“By leveraging Orc’s expertise and investing in our electronic execution solution, Galaxy Futures Co. will now be able to facilitate extremely efficient and reliable access to the Chinese markets especially to the honorable Orc users,” said Aleck Wu, managing director, Galaxy Futures Co.
Orc is busy in China these days. In June, the technology firm announced that Shanghai ShenYi Investment, a firm that operates an index arbitrage fund, implemented Orc’s Trading Bricks solution for its options trading. The firm is trading the ETF options listed on the Shanghai Stock Exchange and is participating in the mock trading of CSI 300 index options at CFFEX. In July, Orient Securities, one of China’s largest securities firms, selected Orc’s Trading Bricks platform for options market making operations on the SSE.
