OSE to Launch Nikkei 225 Micro Futures and Mini Options

Osaka Exchange, Inc. (OSE) will be launching the Nikkei 225 micro Futures and the Nikkei 225 mini Options, linked to the Nikkei Stock Average, in response to strong investor demand. OSE is aiming to launch these contracts on May 29, 2023.

When the Nikkei 225 futures (the current so-called “Large Contract”) started trading in September 1988, the Nikkei Stock Average was at the JPY 28,000 level. The contract unit of the Nikkei 225 futures was JPY 1,000, thus notional value of the contract was equal to JPY 28 million.

18 years later, when the Nikkei 225 mini futures (whose contract unit was one tenth of the Large Contract) commenced trading in July 2006, the Nikkei Stock Average declined to the JPY 17,000 level, and the notional value of the mini contract was JPY 1.7 million.


Afterwards, the Nikkei 225 Stock Average further declined, and it once was priced below JPY 8,000. However, the Stock Average then turned into an uptrend triggered by the so-called “Abenomics”. The Nikkei 225 Stock Average has recovered to the JPY 30,000 level as of June 2022, and that brought up the notional value of the Nikkei 225 futures Large and the mini futures to JPY 30 million and JPY 3 million respectively, with the corresponding margin amount per contract at some JPY 1.3 million and JPY 0.13 million.


The recent trend toward smaller investment units in the cash equity market and other factors have increased demand for more precise risk management tools. There is also demand, in terms of ease of trading, for the launch of futures and options with smaller notional amounts than in the past.

In light of such trends, OSE has decided to introduce the "Nikkei 225 micro Futures," whose contract unit is one tenth of the Nikkei 225 mini, and to transform the current Nikkei 225 Weekly Options into "Nikkei 225 mini Options" by reducing the contract unit to one tenth of its current size and setting regular contract months, in addition to the current weekly contract months. Through this development, OSE seeks to revitalize the futures and options market by widening its investor base.


For details, please refer to:

https://www.jpx.co.jp/english/news/2040/20220617-01.html


Futures Product

Futures Product

Contracts

Contract Unit (Notional Value*)

Nikkei 225 Futures(Large)

JPY 1,000 (JPY 30 million)

Nikkei 225 mini Futures

JPY 1,000 (JPY 30 million)

Nikkei 225 micro Futures

JPY 10 (JPY 0.3 million)

* When the Nikkei 225 is at JPY 30,000



Options Product

Contracts

Contract Unit

Contract Months

Nikkei 225 Options

JPY 1,000

Monthly

Nikkei 225 mini Options

JPY 100

Monthly and Weekly



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