Page 10 - Taiwan Futures Exchange 2019 Annual Report

6 Letter to Shareholders Dear Shareholders: The Taiwan futures market recorded total trading volume of 260,765,482 contracts and average daily volume of 1,077,543 contracts in 2019. The total volume suffered a slight pullback and average daily volume declined 13.61% from 2018's levels on lower equity-market volatility, fewer trading days, and decreased cash-market volume. However, trading volume for the full year remained stable above the 260-million-contract mark, and posted its sixth year above the 200-million-contract level. 2019 has seen market downturn with the average amplitude and volatility of spot-month TAIEX Futures contracts at 82 points and 10.9%, respectively, down 20 points and 6.1 percentage points from the previous year. TAIFEX's annual volume decreased by 15.36% from 2018's level. However, growing appetite for trading in the after-hours trading session caused volume in that session to rise to 29.8%, compared with same products traded in the regular session, an increase of 7.13 percentage points from 2018's figure. Looking at 2019's performance by product, although trading volumes in our core TAIEX Futures, Mini-TAIEX Futures, TAIEX Options, and Equity Futures declined, our foreign equity index futures (including TOPIX Futures, DJIA Futures, S&P 500 Futures, and Nasdaq-100 Futures) were a bright spot for growth, rising nearly 60% from the previous year's level to 2,683,663 contracts in 2019. Drawing on the support and assistance of our regulator and the hard work of the futures industry, TAIFEX introduced Nasdaq-100 Futures and TPEx 200 Futures on 1 October 2019. These new products met the needs of domestic investors interested in trading US and domestic technology stocks, further diversified our product line, and brought our market into closer alignment with major international markets. TAIFEX also sought to develop futures index products and worked with Taiwan Index Plus (TIP), a subsidiary of the Taiwan Stock Exchange, to jointly launch the Taiwan Strategic Indices, which include the TIP TAIFEX TAIEX Futures Index, the TIP TAIFEX TAIEX Covered Call OTM 5% Total Return Index, and the TIP TAIFEX Smart Multi-factor 30 Market Neutral Index. These new indices will enable securities firms and investment trust companies to issue related financial products, which will boost trading volume on the Taiwan futures market. TAIFEX continued to introduce new measures in 2019. In the area of trading, these included: extending the Dynamic Price Banding Mechanism to TAIEX Options and foreign equity index futures trading since 27 May and 1 October 2019, respectively. TAIFEX also lowered the maximum number of contracts per market order on 27 May, and incorporated Gold Futures and Options into the block trading