July 18, 2019, Hong Kong- Horizon Software, the global leading provider of electronic trading solutions, is announcing today support for Inline warrants trading and market making. This announcement follows the launch of Inline warrants in July by the Hong Kong Exchanges and Clearing Limited (HKEX), further enhancing Hong Kong’s structured product offerings. This strategic launch has the objective to position Hong Kong as an investment center of choice with the development of new derivatives and attractive structured products in the Asian zone.
Inline warrants are a type of investment product that, unlike usual investment opportunities, capitalize on stability in price changes of the underlying. They are offered with pre-determined upper and lower limits, and fixed payment at expiry under certain conditions. If the underlying’s price is within the upper and lower strikes, the holder receives the fixed amount of HK$1 per Inline warrant held. Otherwise the holder receives a lesser amount of HK$0.25 per Inline warrant when the underlying asset falls out-of-the-range. The instruments offer investors the opportunity to benefit from the stability of the underlying asset.
Horizon clients today can trade and market make Inline warrants contracts in a single Horizon trading platform. These developments are a natural continuation of Horizon’s historic strong focus and expertise in derivatives and structured products.
Vincent Dumontoy, Global Head of Client Solutions & Services of Horizon Software, said: “Our technology has always been the standard in the derivatives industry, and we are continually modifying our platform to fit in with different countries’ requirements. Hong Kong is the world’s most actively traded market for equity structured products. In 2018, HKEX hit a record with an increase of +47% in new derivative warrants and +100% in CBBCs (Callable Bull/Bear Contracts). With many local clients, we naturally enhanced the product to support investment banks eager to trade this new type of investment product.”
Dumontoy adds, “Horizon Software put resources to further extend coverage for derivatives with Inline warrants as they are growing in popularity as a means of generating returns when volatility is low. We already noticed a strong interest among our clients as those warrants will continue to extend and further include an increasingly wide range of underlyings. Technology is key to manage barrier products and to support the growing needs for a flexible derivative trading environment. Our product strategy focuses on constantly upgrading the functionality of our offering, primarily adding new levels of sophistication to trade the rapidly-evolving structured products.”