TIP and TAIFEX Launch Taiwan Strategic Indices
2019/12/16 11:00

New Futures Index, Covered Call Index and Market Neutral Index to support creation

of new exchange-traded product that facilitate innovative trading strategies


Taiwan Index Plus Corporation (“TIP”), a wholly-owned subsidiary of Taiwan Stock Exchange (“TWSE”) and The Taiwan Futures Exchange (TAIFEX) , will jointly launch Taiwan Strategic Indices, composed of securities with cross-asset classes listed on the Taiwan’s financial market. These three new indices will facilitate the introduction of new exchange-traded and OTC products, including ETFs, ETNs and warrants, for institutional or individual investors looking to enhance their returns or implement diverse hedging strategies.


The new indices include:


l The TIP TAIFEX TAIEX Futures Index replicates the financial returns of holding a long position in the spot month of TAIEX Futures contracts (Ticker symbol: “TX”), which are incrementally rolled into the next-nearest month contracts over the five days prior to the last trading day. The index is to be used as the underlying for issuers of various types of index products.


l The TIP TAIFEX TAIEX Covered Call OTM 5% Total Return Index replicates returns from a “covered call” strategy of investing in the TAIEX, namely holding a long position in the TAIEX while simultaneously selling TAIEX call options (Ticker symbol: “TXO”). This strategic index blends equity index and options contracts to represent index performance.


l The TIP TAIFEX Smart Multi-factor 30 Market Neutral Index reflects the performance of a “market-neutral” strategy through combining long positions in the TIP Smart Multi-factor 30 Index and short positions in the TIP TAIFEX TAIEX Futures Index. The design aims to generate consistent and positive returns in all market conditions.


The Taiwan Strategic Indices mark a milestone for both TIP and TAIFEX, symbolizing the first move of an innovative index series to come. TIP will continue to work closely with issuers to introduce new exchange-traded products that track and utilize its existing suite of futures and options in innovative ways.

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