The Hang Seng Index (HIS) is an adjusted weighted index that keeps track of the largest companies in the Hong Kong stock market.
Hang Seng Binary Options Trading
The HIS is the primary indicator of the general performance of the Hong Kong market. The index comprises of 48 companies and is set to increase to 50 constituent companies soon. The companies are divided into Properties, Finance, Utilities, Industry and Commerce.
Why trade the Hang Seng Index
A major attraction of the Hang Seng is that it offers a comprehensive overview of the Hong Kong stock market; the 48 constituent companies make up 60% of the stock market consolidation.
As an index fund, the HIS requires minimal investment fees, making it a lucrative investment option especially for investors who are looking for capital appreciation with the option of not managing their portfolio.
Although an index fund such as the HIS is not managed professionally, it offers investors the opportunity to add large capitalization stock into their portfolio.
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Type of available binary options for the Hang Seng Index
The common binary options contract types for Hang Seng Index are:
• Basic Call/Put options: You need to predict whether the price of Hang Seng Index will move up or down prior to the expiry time.
• Touch options: You are required to predict whether the price of Hang Seng Index will touch the given strike price prior to the expiry.
• In/Out: You need to predict if the price of Hang Seng Index will remain within a range of two strike prices.
Possible signals for the Hang Seng
· Hong Kong financial stocks rose following expectation of increased liquidity in China, allowing the Chinese mainland and Hong Kong mutual funds to sell investment products to retail buyers in both territories.
· In the face of the Greek debt crisis, Asian shares have only managed to eke gains. The Hang Seng Index has not shown considerable gains as Europe continues talks to find a solution to the crisis.
· The Hang Seng rose considerably, following a boost in the technology sector led by leading tech companies including TenCent Holding Limited.
· Stock in Hong Kong gained following the conclusion of the U.S. Federal Reserve meetings. Shares on the stock exchange rebounded after investors expected the Fed to further delay the deadline for interest rate increases.
Factors Influencing the Hang Seng IndexChinese and global economy - The Hong Kong economy is not only closely tied to the Chinese economy, but also to the economic performance in the rest of the world, especially in Europe and USA. The Hong Kong currency is pegged on the U.S. dollar so any fluctuations in interest rates in the U.S. would have an impact on the Hong Kong economy. At the same time, changes (whether positive or negative) in the Chinese economy will influence the Hong Kong market as well.
Political factors - The pro-democracy supporters in Hong Kong are seeking political independence from China; the country continues to face a series of consecutive political uprisings and tension. Political unrest has had an impact on the country’s micro-economy and has particularly affected the retail sector and foreign investment.