A look at Trading Hang Seng Index FuturesHang Seng index futures are contracts on the Hang Seng. The Hang Seng index is a capitalization weighted index of the largest 33 companies in Hong Kong.The Hang Seng Index has grown much more than most of the European and US stock indexes. As the chart below shows, the index has risen by in excess of 300% over the last five years. In comparison the Dow Jones Industrial Index has risen by around 80% over the same period. INSERT CHART HERE This high volatility can provide many excellent trading opportunities. However, high volatility combined with margin is not without risks. The Hang Seng futures contract are priced at 50x the current price of the Hang Seng Index. For example, if the price of the Hang Seng Index is 30,000 points, the nominal value of the futures contract will be HK$1,500,000.
Currently the US Dollar and Hong Kong Dollar exchange rate is HK$7.80 to US$1. In the above example, the nominal value of the contract would be around US$192,000. The exchange rate is correct at the time of writing this article, but please be aware that currency exchange rates are constantly fluctuating.
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