Volatility Control Mechanism


 

A Volatility Control Mechanism (“VCM”) in the securities market is only applied on all Hang Seng Index and Hang Seng China Enterprise Index constituent stocks to prevent extreme price volatility from trading incidents such as a “flash crash” and algorithm errors, and to address systemic risks from the inter-connectedness of securities and derivatives markets.

The VCM is triggered if the potential transaction price of an applicable security deviates more than ±10% away from the last traded price five minutes ago, and a five minutes cooling-off period will start.  During the cooling-off period, trading is allowed within a pre-defined price band.  Normal trading without restriction will resume after cooling-off period.

The VCM is only applicable to board lot order input during certain periods of the Continuous Trading Session.

For more information about the VCM, please refer to the VCM information bookmicrosite and VCM cooling-off period trigger history in the securities market (derivatives market).

For more information about stock list of VCM, please go to:

https://www.hkex.com.hk/Services/Trading/Securities/Securities-Lists/Volatility-Control-Mechanism-(VCM)-Securities?sc_lang=en