The value of ASX-listed stocks, as measured by the All Ordinaries Index, rose 0.7% in April 2017. This performance was lower than most major markets, including Hong Kong up 2.1 %, Japan up 1.5%, Germany up 1.0% and the US up 0.9%. Singapore was flat whilst the UK was down 1.6%.
Volatility measures for the Australian equity market remained relatively low in April:
• Volatility (as measured by the average daily movement in the All Ordinaries Index) was 0.4% in April, down on the previous month (0.5%).
• Expected future volatility (as measured by the S&P/ASX 200 VIX) in April was an average of 12.7 (compared to 11.1 in March).
The ASX SPI and ASX MINI SPI are based on the S&P/ASX 200 Index, which comprises the top 200 listed stocks on the Australian share market. The S&P/ASX 200 Index is recognised as the investable benchmark for the Australian equities market, covering approximately 80% of the market capitalisation of listed securities in Australia. ASX SPI 200 Futures are approved for trading by the US Commodity Futures Trading Commission (CFTC) and the UK Financial Conduct Authority (FCA).
• A$25 per index point, or $145,000 notional value when the index is at 5,800 points
• Day and night trading sessions for access almost 24 hours a day. Average Daily Volume of Night Trading is around 16-19% of the total volume.
• Available through international hubs including London, Chicago, Singapore and Hong Kong
• Monthly volume for April 2017 was 518,041 (average daily volume: 28,780)
• Available on the next six quarterly expiry months
More information at http://www.asx.com.au/products/index-derivatives.htm
Index options (XJO index options)
Index options give you exposure to a market index, such as the S&P/ASX 200. They offer similar benefits to options traded over shares in individual companies with the added benefit that they offer exposure to the broad range of securities that make up an index. Referred to as XJO Index Options, it provides wide coverage of the share market. Regarded as a leading benchmark by professional investors for broad movements in the stock market, the S&P/ASX200 Index reflects the prices of the largest 200 stocks currently listed on ASX, and represents almost 80% of the market as a whole.
• A$10 per index point
• Day session open 9.50am till 5pm and 5.30pm to 7pm (Sydney time)
• Average daily volume for FY16/17 is approximately 45,000 contracts a day or approximately A$2.6 Billion in daily notional value
More information at http://www.asx.com.au/products/equity-options.htm
RISK DISCLAIMER: Trading in futures products entails significant risks of loss which must be understood prior to trading and may not be appropriate for all investors. Past performance of actual trades or strategies cited herein is not necessarily indicative of future performance. The information contained herein is provided to you for information only and believed to be drawn from reliable sources but cannot be guaranteed; Phillip Capital Inc. assumes no responsibility for errors or omissions. The views and opinions expressed in this letter are those of the author and do not reflect the views of Phillip Capital Inc. or its staff.