Article 12 |
If the Underlying Security of a Stock Option Contract is a stock, the Underlying Assets of each Stock Option Contract are 2,000 shares of the Underlying Security. If the Underlying Security is an ETF, the Underlying Assets of each contract are 10,000 beneficial units of the Underlying Security. If the Underlying Security is an offshore ETF, the quantity of the Underlying Assets of each contract will be separately prescribed by the TAIFEX. However, these restrictions shall not apply when there is contract adjustment in accordance with regulations.
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Article 13 |
If the Underlying Security of a Stock Option Contract is a stock, the strike price multiplier is 2,000. If the Underlying Security is an ETF, the strike price multiplier is 10,000. If the Underlying Security is an offshore ETF, the strike price multiplier will be separately prescribed by the TAIFEX.
Except where otherwise provided, the settlement value of a Stock Option Contract upon expiration shall be calculated by the difference between the value of the underlying assets, as determined based on the final settlement price, and the exercise amount, with the resultant amount rounded down to the new Taiwan Dollar.
The exercise amount under the preceding paragraph is the strike price multiplied by the strike price multiplier.
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Article 14 |
Stock Option Contract premiums shall be quoted in points. If the Underlying Security of a Stock Option Contract is a stock, the premium multiplier is NT$2,000 per point. If the Underlying Security is an ETF, the premium multiplier is NT$10,000 per point. If the Underlying Security is an offshore ETF, the premium multiplier will be separately prescribed by the TAIFEX.
The minimum movement (tick) for a premium quote is as follows:
- A quote of less than 5 points: 0.01 point.
- A quote of 5 points to less than 15 points: 0.05 point.
- A quote of 15 points to less than 50 points: 0.1 point.
- A quote of 50 points to less than 150 points: 0.5 point.
- A quote of 150 points to less than 1,000 points: 1 point.
- A quote of 1,000 points or more: 5 points.
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Article 15 |
If the Underlying Security of a Stock Option Contract is a stock or a domestic component securities ETF, the daily fluctuation limit of the premium of a Stock Option Contract is the daily price fluctuation limit of the Underlying Assets divided by the premium multiplier; if the Underlying Security is an ETF with foreign component securities or an offshore ETF, the daily fluctuation limit of the premium is 15 percent of the opening reference price of the Underlying Security on the given day, provided that this shall not apply when there is a contract adjustment in accordance with regulations.
If the Underlying Security under the preceding paragraph is an ETF with foreign component securities or an offshore ETF, the TAIFEX may adjust the daily fluctuation limit of the premium based on market conditions.
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Article 16 |
Expiration months for a Stock Option Contract shall be the 2 successive calendar months, and 1 nearest quarter months of March, June, September, and December, from the spot month, namely a total of 3 contract months, concurrently listed for trading.
The last trading day for a Stock Option Contract shall be the third Wednesday of the expiration month. This shall not apply, however, under any of the following circumstances:
- If the last trading day falls on a holiday or if trading may not proceed on that day due to a force majeure event, the next business day shall become the last trading day.
- If the TAIFEX has made other provisions for other particular circumstances, those provisions shall govern.
The trading of a contract reaching maturity ends at close of market on the last trading day. The last trading day is the expiration day of the contract.
The next business day following the last trading day of the contract in the expiration month is the first trading day for the contract of the next nearest expiration month.
The TAIFEX may change the delivery months, first trading days, last trading days, and expiration days referred to in the preceding four paragraphs when it deems necessary after reporting to and receiving approval from the competent authority.
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Article 17 |
At the time of listing and during the duration of series of a new expiration month, the TAIFEX shall, based on the given day's opening reference price of the Underlying Securities, consecutively introduce contracts with in-the-money and out-of-the money strike prices at the strike price interval until the highest and lowest strike prices cover 15 percent above and below the base price.
The strike price intervals referred to in the preceding paragraph shall be determined as follows:
- For a strike price of less than NT$10: the interval is NT$0.2 for near-month contracts and NT$0.4 for quarter-month contracts, and the minimum strike price is NT$2.
- For a strike price of NT$10 and above but less than NT$25: the interval is NT$0.5 for near-month contracts and NT$1 for quarter-month contracts.
- For a strike price of NT$25 and above but less than NT$50: the interval is NT$1 for near-month contracts and NT$2 for quarter-month contracts.
- For a strike price of NT$50 and above but less than NT$100: the interval is NT$2.5 for near-month contracts and NT$5 for quarter-month contracts.
- For a strike price of NT$100 and above but less than NT$250: the interval is NT$5 for near-month contracts and NT$10 for quarter-month contracts.
- For a strike price of NT$250 and above but less than NT$1,000: the interval is NT$10 for near-month contracts and NT$20 for quarter-month contracts.
- For a strike price of NT$1,000 and above: the interval is NT$50 for near-month contracts and NT$100 for quarter-month contracts.
When a quarter-month contract becomes a near-month contract, based on the strike price interval of the near-month contract, contracts shall be introduced to supply all the required strike prices covering 15 percent above and below the base price. In addition to listing contracts of different strike prices as described in paragraphs 1 and 2, the TAIFEX may, according to market conditions, list contracts with other strike prices.
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Article 18 |
Except where otherwise prescribed by the TAIFEX, the aggregate open positions on the same side of the market in option contracts representing the same Underlying Securities held by a trader at any time shall be subject to the following tiered position limits:
- Tier 1: The position limit is 8,000 contracts for individual investors, 24,000 contracts for institutional investors, and 60,000 contracts for market makers.
- Tier 2: The position limit is 4,000 contracts for individual investors, 12,000 contracts for institutional investors, and 30,000 contracts for market makers.
- Tier 3: The position limit is 2,000 contracts for individual investors, 6,000 contracts for institutional investors, and 15,000 contracts for market makers.
The aggregate open positions on the same side of the market referred to in the preceding paragraph means the combined positions in Call Options bought and Put Options sold or in Call Options sold and Put Options bought.
The TAIFEX may adjust the limits on aggregate open positions held by market makers under paragraph 1 as it deems necessary in view of market conditions.
The tiers applicable to Underlying Securities under paragraph 1 are as follows:
- Tier 1: Where the total trading volume of the Underlying Securities in the past 3 calendar months reached 1.6 billion or more shares or units; or total trading volume in the past 3 calendar months reached 1.2 billion or more shares or units, and the current number of outstanding shares, total issued beneficial units of an ETF, or total number of units domestically offered and sold by an offshore ETF, has reached 3.2 billion or more shares or units.
- Tier 2: Where the total trading volume of the Underlying Securities in the past 3 calendar months reached 800 million or more shares or units; or total trading volume in the past 3 calendar months reached 600 million or more shares or units, and the current number of outstanding shares, total issued beneficial units of an ETF, or total number of units domestically offered and sold by an offshore ETF, has reached 1.6 billion or more shares or units.
- Tier 3: Where the requirements of the two preceding subparagraphs are not met.
The "number of outstanding shares" in the preceding paragraph and in Article 18-1, paragraph 1 means the total number of shares issued by the issuer of the Underlying Securities, less the following:
- The total percentage of shares held by directors and supervisors under statutory shareholding ratio requirements.
- Number of pledged shares.
- The number of shares that companies newly listed on the TWSE or TPEx are required to place in compulsory central custody.
- Shares repurchased under the Regulations Governing Share Repurchase by Listed and OTC Companies, but not yet retired.
- Shares on which the competent authority imposes a restriction with respect to listing or trading on the TWSE or TPEx.
The TAIFEX will, once every 3 months or according to market status, examine the tier grade of the Underlying Securities based upon the criteria set out in the paragraph 4.
Any raising of the position limit will take effect from the TAIFEX announcement date, and any lowering of the position limit will take effect upon expiration of the next-nearest month contract that is already listed on the announcement date; provided, the TAIFEX may adjust this according to circumstances.
When the position limit is lowered under the preceding paragraph, a position held by a trader prior to the effective date that surpasses the lowered limit standard may be held until the expiration date of the Contracts. However, no new position may be added until the lowered limit standard has been complied with.
Where a trader violates the provisions regarding position limit, the TAFIEX may restrict the trader from adding new positions, or instruct the FCM concerned to liquidate the trader's positions under conditions where this will not affect market price.
An institutional investor may apply to the TAIFEX for a position limit increase based on hedging needs.
The aggregate open positions in Stock Option Contracts held in omnibus accounts are not subject to the limits in paragraph 1, with the exception of undisclosed omnibus accounts, which accounts are subject to the limits for institutional investors.
In addition to complying with the provisions of this article, a trader shall also comply with the TAIFEX Rules Governing Surveillance of Market Positions in holding open positions in Stock Option Contracts.
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Article 18-1 |
If the Underlying Security of Single Stock Futures and Stock Options is a stock, then when the aggregate number of shares represented by the open positions of the Single Stock Futures and Stock Options in the same Underlying Security after close of market on any trading day exceeds 15 percent of the total number of outstanding shares of the Underlying Security, unless otherwise provided, the TAIFEX may impose a restriction to the effect that no trades in those Options are allowed except to close out existing positions, starting from the next trading day. When the above percentage falls below 12 percent, the TAIFEX may remove the restriction starting from the next trading day.
If the Underlying Security of Single Stock Futures and Stock Options is an ETF, then when the aggregate number of beneficial units represented by the open positions of the Single Stock Futures and Stock Options in the same Underlying Security after close of market on any trading day exceeds 70 percent of the total number of outstanding beneficial units of the Underlying Security, unless otherwise provided, the TAIFEX may impose a restriction to the effect that no trades in those Options are allowed except to close out existing positions, starting from the next trading day. When the above percentage falls below 56 percent, the TAIFEX may remove the restriction starting from the next trading day.
If the Underlying Security of Single Stock Futures and Stock Options is an offshore ETF, then when the aggregate number of beneficial units represented by the open positions of the Single Stock Futures and Stock Options in the same Underlying Security after close of market on any trading day exceeds 70 percent of the total number of the domestically offered and sold beneficial units of the Underlying Security, unless otherwise provided, the TAIFEX may impose a restriction to the effect that no trades in those Options are allowed except to close out existing positions, starting from the next trading day. When the above percentage falls below 56 percent, the TAIFEX may remove the restriction starting from the next trading day.
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Article 19 |
The daily settlement price for a Stock Option Contract shall be determined as follows:
- The daily settlement price for a Stock Contract Option shall be the execution price of the last matched trade of that day.
- The daily settlement price shall be decided by the TAIFEX where no execution price is available 15 minutes before close of market on that day, or where the settlement price in the preceding subparagraph is obviously unreasonable.
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Article 19-1 |
The final settlement price for a Stock Option Contract shall be determined by the arithmetic mean of the prices of the Underlying Securities on the securities market on the expiration date that are available within the 60 minutes immediately preceding the close of market that day. If the Taiwan Stock Exchange postpones market closing or matching, the TAIFEX may extend the aforementioned 30-minute sampling time.
The method of the calculation under the preceding paragraph shall be as separately adopted by the TAIFEX.
If the expiration date of a Stock Option Contract falls on a day on which the Underlying Securities are suspended from trading, the day for determining the final settlement price shall be substituted by the business day before the first day on which the trading is suspended.
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Article 20 |
A Stock Option Contract may be exercised on the expiration date only. An open position that is in-the-money on the expiration date shall be settled in cash by the net difference between the value of the Underlying Assets, as calculated based on the final settlement price, and the exercise amount.
An in-the-money position referred to in the preceding paragraph means a Call Option position when the value of the Underlying Assets, as calculated based on the final settlement price, is higher than the exercise amount, or a Put Option position when the value of the underlying assets, as calculated based on the final settlement price, is lower than the exercise amount. Writers of in-the-money positions shall pay the difference described in the preceding paragraph, while buyers are entitled to receive the difference.
Settlement of an exercised Stock Option Contract shall be handled in accordance with point 6 of the TAIFEX Directions for Clearing and Settlement by Futures Commission Merchants and Clearing Members.
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Article 20-1 |
Buyers who intend to exercise a Stock Option Contract shall make a declaration on the expiration date. An in-the-money position, however, shall be deemed automatically exercised if an in-the-money position within the meaning of Article 20 falls in the range announced by the TAIFEX, unless the buyer declares waiver of the right to exercise in advance.
Futures commission merchants shall submit notice within the prescribed time set out by the TAIFEX indicating exercise or waiver of right.
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Article 21 |
The TAIFEX shall randomly assign a writer to perform the contract.
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