What Is a Utility ETF?

As one of the most representative blue-chip indexes in the Shanghai market, the SSE 50 ETF is the tracking target of the first domestic trading open-end index fund (ETF). The SSE 50ETF is an innovative fund.

SSE 50ETF

SSE 50

There is no difference between buying and selling SSE 50 ETFs and buying and selling ordinary stocks and closed-end funds. The trading time is 9:30 to 11:30; 13:00 to 15:00, and a 10% price limit is also implemented. The secondary market transaction of the SSE 50ETF is referred to as 50ETF for short, the transaction code is 510050, the number of declared purchases and sales is 100 or an integer multiple thereof, and the minimum unit of the declared price change is 0.001 yuan without stamp duty. The operation of buying and selling SSE 50ETF is very simple, just like buying a closed-end fund. For example, if you want to purchase 10,000 Shanghai Stock Exchange 50 ETFs, you only need to enter the code 510050, the quantity 10000, and the price such as 2.675 yuan, and the commission should not exceed 0.3% of the transaction amount. For details, please consult the securities company that opened the account.

Xinhua News. The China Securities Regulatory Commission has recently approved the Shanghai Stock Exchange to launch a stock option trading pilot. The pilot product is the Shanghai Stock Exchange 50ETF option, which was officially listed and traded on February 9, 2015. ^[1]

The Shanghai Stock Exchange was released on the evening of February 2, 2015. After the Shanghai Stock Exchange organized the selection of relevant securities companies, Guotai Junan Securities, CITIC Securities, Haitong Securities, China Merchants Securities, Qilu Securities, Guangfa Securities, Huatai Securities, Oriental Securities and other 8 securities companies became Shanghai Securities. The first market makers of 50ETF options. ^[2]

On February 9, 2015, the SSE 50ETF option contract was officially listed and traded. There are two types of SSE 50ETF options listed for trading: call and put, 4 expiration months, 5 exercise prices, and a total of 40 contracts. As China's first on-the-spot options product, the launch of this product marks the advent of China's capital market options era.

According to the characteristics of options products, the Shanghai Stock Exchange has set a non-linear fluctuation range for the SSE 50ETF options. The fluctuation range is not a percentage of the option's own price, but an absolute value. The maximum increase varies according to the extent of the option's imaginary value and real value. The maximum increase of the par value and real value options is 10% of the closing price before the 50ETF, while the maximum increase of the imaginary value is smaller. Limited, the largest decline is 10% of the closing price before the 50ETF. The SSE will announce the daily limit prices of all option contracts before the opening of each trading day.

According to reports, in addition to the same types of ordinary limit orders, spot-to-market limit-to-limit orders, and market-to-market residual withdrawal orders as the stock options, the Shanghai Stock Exchange also added full-time instant limit orders and full-time instant market price orders. The meaning of these two types of commissions is that if all transactions cannot be completed immediately, they are automatically cancelled. Investors can hold two-way positions in the market, that is, holding the right positions and the obligation positions of the same option contract at the same time. After the close, the trading system will automatically hedge the two-way positions. Investors can only hold one-way positions, that is, they can only hold the same option. Right position or obligation position of the contract. ^[3]