TAIPEI (Taiwan News) — The Taiwan Futures Exchange (TAIFEX) announced on Monday (Dec. 6) the listing of small finance-sector futures (ZFF) as major exchanges around the world offer lower-cost tickets for futures investing to lure young investors and boost trading momentum.
The exchange has been dedicated to developing various innovative futures products, and demand for hedging is growing amid COVID-19-related market anxiety and hype. Exchanges profits are surging as micro futures attract more retail investors, including TAIFEX, which saw a record high turnover this year, with 370 million contracts being traded as of early December.
The number represents 27% growth compared to the same period last year in the country.
TAIFEX Chairman Wu Tzu-hsin (吳自心) has high hopes for the new mini finance futures product, citing young Taiwanese investors' growing interest in financial stocks. A report by Taiwan Depository Clearing shows that financial stocks accounted for 50% of the top 20 longest-held stocks among young investors in the country last year.
The financial sector is second only to the country’s globally critical electronics industry in terms of market capitalization. Complementing TAIFEX’s larger Finance Sector Index Futures (TF) contract and one-fourth its size, the new ZFF contract costs US$15,000 (NT$400,000) at the current index level, the TAIFEX statement read.
As more young players hop on the futures hedging bandwagon, the head of Taiwan's Chinese National Futures Association, Mai I-Yung (糜以雍) advised brokerage houses to disclose generic risk warnings to avoid potential disputes, as they have relatively lower risk tolerance.
