The Taiwan Futures Exchange (Taifex) is rolling out a new product to offer traders greater flexibility and accessibility in capital management amid rising index levels.

Since the beginning of 2023, the Taiex Index has surged by over 9,000 points, recently surpassing the 24,000-point milestone for the first time. This impressive growth has significantly increased the contract size of Mini-Taiex Futures (MTX), now exceeding NT$1.2 million (US$36,750) per contract, up from about NT$270,000 when first introduced in April 2001.

In response to the heightened trading thresholds associated with MTX and Taiex Futures (TX), Taifex is set to launch Micro Taiex Futures (TMF) on July 29 2024.

A more accessible and versatile trading instrument, TMF features a multiplier of NT$10 per index point, resulting in a contract size of NT$240,000 at an index level of 24,000 points.

This new contract size is one-fifth that of MTX and one-twentieth that of TX, providing investors with a highly adaptable and precise trading tool. The reduced contract size facilitates finer position adjustments and more efficient execution of hedging or trading strategies, allowing investors to respond swiftly to market changes and enabling better capital allocation across a broader spectrum of assets.

Complementing the existing TX and MTX, TMF seamlessly integrates into Taifex’s current portfolios. Traders can also exploit arbitrage opportunities between these contracts or with other products such as the Mini Electronics Sector Futures, Taiwan Semiconductor 30 Futures, and single stock futures on TSMC, MediaTek and Hon Hai Precision.

According to Taifex, the launch of TMF underscores its commitment to continually introducing new products that enhance trading flexibility and diversification, expand market participation, and meet the evolving needs of investors.