A business objective of I-Access Group is to provide one-stop shop of financial investment services. By applying licences for different investment products, I-Access wants to give our clients more investment choices. Other than the expansion of the investment product list, I-Access also investigates the trading mode of the products, keeping the old ways but introducing new concepts to execute order instructions which are difficult to be handled by phone in the old days. With the help of automatic trading system, I-Access clients can input complex transactions not capable to be processed manually.

Although I-Access delivers our services principally through the Internet, the Group sets up branch network to provide counter services to clients at different locations.

i-Bonds
i-Bonds are issued by Hong Kong SAR Government for individuals holding valid Hong Kong Identity Cards to subscribe. Issued i-Bonds are listed and traded on the HKEX. Client may trade i-Bonds at I-Access trading platforms. The Issue Circulars of i-Bonds can be viewed at this site.

Silver Bonds
Silver Bonds are issued by Hong Kong SAR Government for individuals holding valid Hong Kong Identity Cards and aged 65 or above to subscribe.

Subscribing Silver Bonds through I-Access, you enjoy the following fees waived:
1. bond subscription fee;
2. bond custody fee;
3. bond interest payment fee;
4. bond redemption fee at maturity;
5. early bond redemption fee; and
6. bond deposit fee.

Silver Bonds are unlisted bonds, so if holder wants to redeem the bonds before maturity, you may instruct I-Access to request so from Hong Kong SAR Government.

The Issue Circulars of Silver Bonds can be viewed at this site. Information on this webpage does not form part of the Offering Circular. Client may also obtain a copy of the Issue Circulars of Silver Bonds at any I-Access Services Centre. You may click the following 'Contact us' or call I-Access hotline to request for the addresses of I-Access Services Centres

Unlisted bonds issued by listed issuers
Listed companies issue bonds or guarantee bonds issued by their subsidiaries to obtain funds from fixed income markets. Bond investment was principally operated by banks or i-banks, which charge very high subscription fees and custodian fees, significantly lowering returns from bond investment. I-Access online bond subscription service collects no subscription fee nor custodian fee, resulted in higher yield from clients' bonds.

Corporate bonds are issued by private placement in general. Therefore, the minimum subscription amount is HK$500,000. Bond tenors range from 3 to 5 years, using fixed or floating rates to calculate interest. As the secondary market of bonds is not very active, bond investment is generally holding till maturity.

The procedure to subscribe bonds is similar to that of eIPO. The lead manager of the bond issuance determines the final allotment. If the allotted amount is less than the total subscription amount, I-Access distributes the bonds based on a first-come-first-served basis.

I-Access Investors Limited is the only local broker in Hong Kong approved by the SFC as an "Approved Lending Agent" to provide stock lending and borrowing services among clients. Stock lending and borrowing have always been privileged financial services provided to institutional investors. I-Access utilizes the facility of the Internet to reduce the lowest borrowing quantity to one board lot to allow retail investors to participate in the activity.

Stock Borrowing

Client may borrow stock if facing the following investment situations:

1.	When a stock has appreciated too much, over-bought or is expected to fall, you may borrow the stock for short-selling;
2.	When you are conducting pairs trading to set up long-short positions;
3.	When you are holding an in-the-money stock put option, you can borrow the underlying stock for exercise;
4.	When you have a short position in an in-the-money stock call option, which has been assigned, resulted in a short position in the underlying stock.

Open Account

1.	To borrow a stock, you have to pay collateral at your margin account, so you have to activate your margin account before going to next step;
2.	At the "account" menu choose "add a/c" and then select "Stk Borrow". Confirm your request by paying the IRD's registration fee;
3.	When you receive the email from I-Access, follow the instructions to download the account opening documents;
4.	Fill the account opening documents and return the originals to I-Access;
5.	After checking the account opening documents and lodging them with IRD for registration, I-Access will notify you that the account is opened.

Stock Borrowing Procedure

1.	Your margin account should prepare the collateral for the 25% of the market value of the stock to be borrowed;
2.	Stock can be borrowed during the period from 6 am to 9 pm every day;
3.	At "Portfolio" window, choose "Lending" account, and then press "Borrow" button;
4.	Pick the security code and the quantity you want to borrow. After confirmation, the borrowing fee of HK$5 and day interest will be deducted to complete the stock borrowing process.

Stock Returning Procedure

1.	Borrowed stock not subject to short-selling can be returned during the period from 6 am to 9 pm every day;
2.	At "Portfolio" window, choose "Lending" account, and then press "Return" button;
3.	Pick the security code and the quantity you want to return, and the stock is returned after confirmation.

Stock Lending

Lending stock allows I-Access clients to earn additional interest income: when you buy a stock, other than price appreciation and dividend payment, now you can collect stock lending interest. Share price can go up or fall, dividend can be nil, but stock lending interest is always a "positive return" regardless of market direction. Client holding a stock with an intention not to sell shortly or the purchase price is higher than the prevailing price can consider lending the stock to increase investment return.

Open Account

1.	At the "account" menu choose "add a/c" and then select "Stk Lend". Confirm your request by paying the IRD's registration fee;
2.	When you receive the email from I-Access, follow the instructions to download the account opening documents;
3.	Fill the account opening documents and return the originals to I-Access;
4.	After checking the account opening documents and lodging them with IRD for registration, I-Access will notify you that the account is opened.

Stock Lending Procedure

1.	Stock can be lent during the period from 6 am to 9 pm every day;
3.	At "Portfolio" window, choose "Lending" account, and then press "Lend" button;
4.	Pick the security code and the quantity you want to lend and the process is completed after confirmation.

Request for Stock Returning Procedure

1.	Stock under lending can be requested to be returned during the period from 5 pm to 9 pm every day;
2.	At "Portfolio" window, choose "Lending" account, and then press "Return" button;
3.	Pick the security code and the quantity you want to request for returning, and the stock is returned after confirmation.

When an investor believes that the price of a stock is performing poorly, or wants to conduct pairs trading (or long-short positions), it is necessary to short. Hong Kong securities market forbids naked short, so I-Access clients have to first borrow the stock before short selling.

After a stock is borrowed successfully, to place a short selling order, press "S" in the quotation window and choose "Short sell" to do so.

The following points must be noted when placing a short-selling order:

1.	Stocks that can be short are restricted to be the list of Designated Securities Eligible for Short Selling as provided by the HKEx at its website from time to time;
2.	To short a stock, its quantity at the margin account must be less than one board lot;
3.	The first short selling order of the stock newly borrowed has to be sold at the best selling price in the market or higher, and cannot be sold directly to the bidders. After that, the re-selling of the short position does not have this price restriction;
4.	After short-selling, the collateral at the margin account must be kept at least 125% of the short market value, or otherwise, I-Access will send a margin call notice or force buy-in the short quantity;
5.	I-Access has the right to require client to buy-in the short quantity as soon as possible under the following circumstances: (a) The short stock is removed from the list of Designated Securities Eligible for Short Selling; (b) The short stock is undergoing a corporate action which requires the return of the stock, e.g. privatization; (c) The client lending the stock requests for returning the lent stock,

Spot gold and silver trading is conducted by Novel Day Commodities Limited for its clients. Contract details are as follows:

Spot metal	Gold		Silver
	Standard (LAU)	Mini (MAU)	Standard (LAG)	Mini (MAG)
Contract weight	100 ounces	10 ounces	5,000 ounces	500 ounces
Collateral/lot	HK$8,000	HK$800	HK$8,000	HK$800
Max gain/loss/lot	US$1,000	US$100	US$1,000	US$100
Trading currency	US$
Settlement currency	HK$
Trading limit	1-100 lots
Minimum fluctuation	US$0.1		US$0.001
Trading hours (HK)	0 a.m. - 10 p.m. (British Summer Time) 0 a.m. - 11 p.m. (British Winter Time) Trading continues on Saturdays, Sundays and public holidays		8 p.m. - next 7 p.m. (British Summer Time) 9 p.m. - next 8 p.m. (British Winter Time) Trading continues on Saturdays, Sundays and public holidays
Settlement date	Monday to Friday (excluding Saturdays, Sundays and English bank holidays)
Settlement time (HK)	10:40 p.m. (British Summer Time) 11:40 p.m. (British Winter Time)		7:40 p.m. (British Summer Time) 8:40 p.m. (British Winter Time)
Settlement price	All contracts settled using the gold price announced at 3 p.m. (UK) by the London Bullion Market Association (LBMA)		All contracts settled using the silver price announced at 12 noon (UK) by LBMA
Settlement amount	Long position: (Settlement price – Contract price) x Contract weight Short position: (Contract price – Settlement price) x Contract weight Max gain/loss for each standard and mini contract is US$1,000 and US$100 respectively

Characteristics of bullion trading

Details of I-Access spot rollover

Name of Registration	Novel Day Commodities Limited
Registration No.	A-B-23-09-01439

Hong Kong securities transactions use board lot as the basic unit. Different securities have different number of shares/units in one board lot. Quantities less than one board lot is called odd lot. You may refer to "Odd Lot Trading" regarding this.

Trading hours
Hong Kong securities market is open Monday to Friday (except public holidays).

Clients may enter limit orders, change or cancel limit orders not placed to the market any time.

Limit order
Limit order lets client set a price level, where the matching prices will be equal to or better than that level. E.g. the bought trade prices should be lower than or equal to the input price. Clients can also set the effective period, so before that, the unmatched portion will be sent to the market every day until complete execution or cancelled by clients. Limit orders entered before the auction period will be placed at start of the auction period. If a limit order placed during the auction period is not fully matched at start of the continuous trading session, and its order prices are within the allowed range of the exchange rules, it will be queuing in the market; otherwise it may be cancelled by the exchange. Limit orders entered after the market close will be regarded as next-day orders.

Auction order
Auction order is matched at the final Indicative Equilibrium Price (IEP is the price to match the largest quantity), so clients need not enter any price. Auction order can only be placed during auction period. Auction orders have a higher priority than limit orders, but there is no guarantee of full match. Unmatched auction orders will be automatically cancelled.

Market order
Market order is executed at market prices. Market bid (ask) order will match with the best ask (bid) orders in the market, so client need not enter any order price. Market orders can only be placed during continuous trading period. Depending on the number of queuing orders in the market, most of the market orders are fully traded, but there is no guarantee of full match. Unmatched market orders will be automatically cancelled. If the order quantity is very large, a market order may match with a number of orders in the market. Each market orders placed by I-Access can match up to 10 prices in the market.

Stop order
When a client holds a particular security, he/she can set a stop order. When the security price falls to the trigger level, the order will sell the security using a market order or a limit order (at price trigger minus tolerance). Client can also set the effective period, so before that, the unmatched portion will be sent to the market every day until complete execution or cancelled by clients.

Trigger order
Trigger order is a conditional instruction, including a trigger price and an order price. The trigger condition client can choose includes up or down trigger: only when the nominal price from below the trigger price rises to or above the trigger price in case of up trigger, or falls from above the trigger price to or below the trigger price in case of down trigger, a limit order is sent to the market. Otherwise, the trigger order is only in a standby status. Trigger order can be used for stop loss, stop gain or price chasing.

OCO order
OCO order is another conditional instruction, including a first order price, trigger price and a second order price. OCO order is a combination of a limit order and a trigger order. After placing, the limit order with the first order price will be sent to the market. When the trigger order is triggered, the first limit order will be cancelled, and then the second limit order will be sent to the market. If the first limit order is fully matched, the trigger order will be automatically cancelled. OCO order can be used for stop gain and stop loss or price changing.

If-then order
If-then order is a combination order with one buy order and one sell order. The instruction includes a buy limit price and a sell limit price. The buy order will be executed first, and the sell order on the bought quantity will be sent to the market automatically once the buy order is fully matched. If-then order can be used for short-term trading, spread trading, and stop gain.

If-sell-then-buy order
If-sell-then-buy order is a combination order with one sell order and one buy order. The instruction includes a sell limit price and a buy limit price. The sell order will be executed first, and the buy order on the sold quantity will be sent to the market automatically once the sell order is fully matched. If-sell-then-buy order is to reduce holding cost when stock price fall is expected.

If-OCO order
If-OCO order is again a combination order with one buy order and one sell order. The sell order is set to be an OCO order. The instruction includes a buy limit price, the first sell limit price, trigger price and the second sell limit price. The buy limit order will be placed to the market in the first place. When it is completed, the first sell limit order will be automatically sent out to sell the quantity purchased. If this sell order is fully matched, the trigger portion is cancelled; however, if the nominal price falls to the trigger level, the second sell order will be released to replace the first sell order to sell the unmatched part of the order. If-OCO order is used for short-term trading with stop-gain-and-loss feature.

Non-stop buy-sell order
Non-stop buy-sell order is an instruction to repeat an if-then order continuously. Pick first buy or first sell. After the buy and sell limit prices are set, the selected first buy/sell order is placed. When the buy/sell order is fully matched, the sell/buy order is placed then. After the order is fully matched, the order placement cycle repeats again, and so on, until market close or cancelled. This instruction can be used for earning bid-ask spread.

TSF
RMB-denominated securities covered by RMB Equity Trading Support Facility (TSF) can be traded in HK$. As one of the TSF Participants, I-Access provides limit and market orders under TSF. RMB-denominated securities purchased through TSF must be sold using the same facility.

Dual-counter trading
HKEx sets up dual-counter model to allow one securities to be traded in RMB and HK$ at different counters. To purchase such securities using a particular currency, you can buy at the corresponding counter, e.g. clients may input buy orders at the HK$ counter to purchase using HK$. If you want to switch the selling currency, you may choose the trading currency freely at the purchase counter to change the currency of the sell orders. Dual-counter trading is available not only for ordinary buy and sell orders, but also for the above-mentioned special orders.

Risk disclosure statements for rights issue
Nature of Rights Issue
A rights issue is a one-time offering of shares in a company to existing shareholders, allowing them an opportunity to maintain their proportional ownership without being diluted by buying additional new shares at a discounted price on a stated future date. Until the date at which the new shares can be purchased, investors may trade the rights to the market the same way they would trade ordinary shares. If the investors do not exercise their rights within the specified period of time, the rights will expire. If the investors do not intend to exercise their rights, they can sell them on the open market. Once exercised, the rights cannot be used again.

Risks associated with Rights Issue
It is easy to be enticed by shares offered at a discount, but you should not assume that you are getting a bargain. An informed decision should be made by looking at the rationale behind the fund raising exercise.

A company may use a rights issue to cover debt, especially when they are unable to borrow money from other sources. You should be concerned with whether or not the management are addressing any underlying problems.

If you decide not to take up the rights your overall shareholding in the company will be diluted as a result of the increased number of shares in issue.

If you do not participate in the rights issue within the specified time-frame your nil-paid rights will lapse. The company will sell these entitlements and distribute any net proceeds after deduction of the offer price and costs. The amount of lapsed proceeds, if any, will not be known until the offer has closed. Lapsed proceeds are not guaranteed.

Investments and income arising from them can fall in value and you may get back less than you originally invested.

Risk disclosure statements for derivative securities
Equity-linked Instrument (ELI)
Where you instruct the Company to use the Account for trading equity-linked instrument, you acknowledge that ELIs are not principal protected and you may suffer a loss if the price(s) of the reference asset(s) of an ELI go against your view. In extreme cases, you could lose your entire investment. The risk of loss may be substantial in certain circumstances and should not deal in them unless you understand the nature of the transactions entering into and the extent of your exposure to risk. You should carefully consider whether the transactions are suitable in the light of your circumstances and financial position.

You understand that while most ELIs generally higher than the interest on an ordinary time deposit or traditional bonds, the potential gain on your ELI may be capped at a predetermined level specified by the issuer. During the investment period, you have no rights in the reference asset(s). Changes in the market prices of such reference asset(s) may not lead to a corresponding change in the market value and/or potential payout of the ELI.

You are fully aware that an investment in ELI exposes you to equity risk. You are exposed to price movements in the underlying security and the stock market, the impact of dividends and corporate actions and counterparty risks. You accept the legal obligation to take the underlying instrument at the pre-agreed conversion price instead of receiving the principal of the ELI, if the price of the underlying instrument falls below the conversion price. You will therefore receive an instrument that has fallen in value to the extent that it is less than your original investment, and might even lose the entire principal or deposit if the underlying instrument become worthless. ELIs are not secured on any assets or collateral.

You are fully aware that when you purchase an ELI, you rely on the credit-worthiness of the issuer. In case of default or insolvency of the issuer, you will have to rely on your distributor to take action on your behalf to claim as an unsecured creditor of the issuer regardless of the performance of the reference asset(s). Issuers may provide limited market making arrangement for their ELIs. However, if you try to terminate an ELI before maturity under the market making arrangement provided by the issuer, you may receive an amount which is substantially less than your original investment amount. Equity-linked instrument may be "non-transferable" and it may be impossible for you to close out or liquidate them. Issuer of an ELI may also play different roles, such as the arranger, the market agent and the calculation agent of the ELI. Conflicts of interest may arise from the different roles played by the issuer, its subsidiaries and affiliates in connection with the ELI.

Investors should note that any dividend payment on the underlying security may affect its price and the payback of the ELI at expiry due to ex-dividend pricing. Investors should also note that issuers may make adjustments to the ELI due to corporate actions on the underlying security. Potential yield Investors should consult their brokers on fees and charges related to the purchase and sale of ELI and payment/delivery at expiry. The potential yields disseminated by HKEx have not taken fees and charges into consideration.

Derivative Warrants
1. Issuer risk
Warrants are not asset backed. In the event that a warrant issuer becomes insolvent and defaults on its warrants, derivative warrant holders are unsecured creditors of an issuer and they have no preferential claim to any assets an issuer may hold. Therefore, investors are exposed to the credit and other risks in relation to the issuer.

2. Gearing risk
Although derivative warrants may cost a fraction of the price of the underlying assets, a derivative warrant may change in value to a much greater extent than the underlying asset. Gearing effect can work in reverse. A small change in the price of the underlying asset can lead to a substantial decline in the warrant price. In the worst case, the value of the derivative warrants may fall to zero and holders may lose their entire investment amount.

3. Limited Life
Unlike stocks, derivative warrants have an expiry date and therefore a limited life. Unless the derivative warrants are in-the-money, they become worthless at expiration. Deeply out-of-the-money warrants are less sensitive to movements in the price of the underlying asset because such warrants are unlikely to become in-the-money on expiry.

4. Time Decay
One should be aware that so long as other factors remain unchanged the value of derivative warrants will decrease over time. Therefore, derivative warrants should never be viewed as products that are bought and held as long term investments.

5. Volatility
Other factors being equal an increase in the volatility of the underlying asset should lead to a higher warrant price and a decrease in volatility lead to a lower derivative warrant price.

6. Market forces
In addition to the basic factors that determine the theoretical price of a derivative warrant, derivative warrant prices are also affected by all other prevailing market forces including the demand for and supply of the derivative warrants. This is particularly so when a derivative warrant issue is almost sold out and when issuers make further issues of an existing derivative warrant.

7. Liquidity risk
Although derivative warrants have liquidity providers, there is no guarantee that investors will be able to buy/sell derivative warrants at their target prices any time they wish.

8. Turnover
High turnover should not be regarded as an indication that a derivative warrant’s price will go up. The price of a derivative warrant is affected by a number of factors in addition to market forces, such as the price of the underlying assets and its volatility, the time remaining to expiry, interest rates and the expected dividend on the underlying assets.

Callable Bull/Bear Contracts (CBBC)
1. Mandatory call
CBBC are not suitable for all investors and investors should consider their risk appetite prior to trading. A CBBC may be called by the issuer and cease trading when the price of the underlying asset hits the Call Price. Payoff for Category N CBBC will be zero when they expire early. When Category R CBBC expire early the holder may receive a small amount of Residual Value payment, but there may be no Residual Value payment in adverse situations. Once the CBBC is called, even though the underlying asset may bounce back in the right direction, the CBBC which has been called will not be revived and investors will not be able to profit from the bounce-back.

2. Gearing effects
Since a CBBC is a leveraged product, the percentage change in the price of a CBBC is greater compared with that of the underlying asset. When the underlying asset price is closer to the CBBC Call Price, the risk for the CBBC being called is higher. Theoretically, the CBBC gearing ratio will be higher, reflecting the risk of being called. Investors may suffer higher losses in percentage terms if they expect the price of the underlying asset to move one way but it moves in the opposite direction.

3. Limited Life
A CBBC has a limited lifespan as denoted by the fixed expiry date. The life of a CBBC may be shorter if called before the fixed expiry date. The price of a CBBC fluctuates with the changes in the price of the underlying asset from time to time and may become worthless after expiry and in certain cases, even before the normal expiry if the CBBC has been called early.

4. Movement with underlying asset
The price changes of a CBBC tends to follow closely the price changes of its underlying asset, but in some situations it may not. Prices of CBBC are affected by a number of factors, including its own demand and supply, funding costs and time to expiry. The delta for a particular CBBC may not always be close to one, especially when the price of the underlying asset is close to the Call Price.

5. Liquidity
Although CBBC have liquidity providers, there is no guarantee that investors will be able to buy/sell CBBC at their target prices any time they wish.

6. Funding costs
The issue price of a CBBC includes funding costs charged upfront for the entire period from launch to normal expiry. Funding costs are gradually reduced over time as the CBBC moves towards expiry. The longer the duration of the CBBC, the higher the total funding costs. When a CBBC is called, the CBBC holders (investors) will lose the funding cost for the remaining period even though the actual period of funding for the CBBC turns out to be shorter. Investors should also note that the funding costs of a CBBC after launch may vary during its life.

7. Trading of CBBC close to Call Price
When the underlying asset is trading close to the Call Price, the price of a CBBC may be more volatile with wider spreads and uncertain liquidity. CBBC may be called at any time and trading will terminate as a result. However, the trade inputted by the investor may still be executed and confirmed by the investors after the Mandatory Call Event (MCE) since there may be some time lapse between MCE and suspension of the CBBC trading. Any trades executed after the MCE will not be recognized and will be cancelled. Therefore, investors should be aware of the risk and ought to apply special caution when the CBBC is trading close to the Call Price.

8. Overseas Underlying Assets
CBBC issued on overseas underlying assets may be called outside the Exchange’s trading hours. Besides, Investors trading CBBC with overseas underlying assets are exposed to an exchange rate risk as the price and cash settlement amount of the CBBC are converted from a foreign currency into Hong Kong dollars.

Exchange Traded Funds (ETF)
1. Market risk
ETFs are typically designed to track the performance of certain indices, market sectors, or groups of assets such as stocks, bonds, or commodities. ETF managers may use different strategies to achieve this goal, but in general they do not have the discretion to take defensive positions in declining markets. Investors must be prepared to bear the risk of loss and volatility associated with the underlying index/assets.

2. Tracking errors
Tracking errors refer to the disparity in performance between an ETF and its underlying index/assets. Tracking errors can arise due to factors such as the impact of transaction fees and expenses incurred to the ETF, changes in composition of the underlying index/assets, and the ETF manager’s replication strategy. (The common replication strategies include full replication/representative sampling and synthetic replication.)

3. Trading at discount or premium
An ETF may be traded at a discount or premium to its Net Asset Value (NAV). This price discrepancy is caused by supply and demand factors, and may be particularly likely to emerge during periods of high market volatility and uncertainty. This phenomenon may also be observed for ETFs tracking specific markets or sectors that are subject to direct investment restrictions.

4. Foreign exchange risk
Investors trading ETFs with underlying assets not denominated in Hong Kong dollars are also exposed to exchange rate risk. Currency rate fluctuations can adversely affect the underlying asset value, also affecting the ETF price.

5. Liquidity risk
Securities Market Makers (SMMs) are Exchange Participants that provide liquidity to facilitate trading in ETFs. Although most ETFs are supported by one or more SMMs, there is no assurance that active trading will be maintained. In the event that the SMMs default or cease to fulfill their role, investors may not be able to buy or sell the product.

Futures-based ETF
1. Risk of rolling futures contracts
Futures contracts are binding agreements that are made through futures exchanges to buy or sell the underlying assets at a specified time in the future. Rollover occurs when an existing futures contract is about to expire and is replaced with another futures contract representing the same underlying but with a later expiration date. When rolling futures contracts forward (ie selling near-term futures contracts and then buying longer-term futures contracts) in a situation where the prices of the longer-term futures contract are higher than that of the expiring current-month futures contract, a loss from rolling (ie a negative roll yield) may occur. Under such circumstances, the proceeds from selling the near-term futures contracts will not be sufficient to purchase the same number of futures contracts with a later expiration date which has a higher price. This may adversely affect the NAV of the futures-based ETF.

2. Risk of statutory restrictions on number of futures contracts being held
There is a statutory position limit restricting the holding of futures contracts traded on the recognised exchange company to no more than a specific number of such futures contracts. If the holding of such futures contracts of a futures-based ETF grows to the limit, this may prevent the creation of units of the ETF due to the inability to acquire further futures contracts. This may lead to differences between the trading price and the NAV of the ETF units listed on the exchange.

Exchange Traded Notes (ETN)
ETN is a type of unsecured, unsubordinated debt security issued by an underwriting bank, designed to provide investors access to the returns of various market benchmarks. The returns of ETNs are usually linked to the performance of a market benchmark or strategy, minus applicable fees. Similar to other debt securities, ETNs have a maturity date and are backed only by the credit of the issuer.

You can buy and sell the ETNs on the exchange or receive a cash payment at the scheduled maturity or may early redeem the ETNs directly with the issuer based on the performance of the underlying index less applicable fees, with redemption restrictions, such as the minimum number of ETNs for early redemption, may apply.

There is no guarantee that investors will receive at maturity, or upon an earlier repurchase, investors’ initial investment back or any return on that investment. Significant adverse monthly performances for investors’ ETNs may not be offset by any beneficial monthly performances. The issuer of ETNs may have the right to redeem the ETNs at the repurchase value at any time. If at any time the repurchase value of the ETNs is zero, investors’ investment will expire worthless. ETNs may not be liquid and there is no guarantee that you will be able to liquidate your position whenever you wish.

Although both ETFs and ETNs are linked to the return of a benchmark index, ETNs as debt securities do not actually own any assets they are tracking, but just a promise from the issuer to pay investors the theoretical allocation of the return reflected in the benchmark index. It provides limited portfolio diversification with concentrated exposure to a specific index and the index components. In the event that the ETN issuer defaults, the potential maximum loss could be 100% of the investment amount and no return may be received, given ETN is considered as an unsecured debt instrument.

The value of the ETN may drop despite no change in the underlying index, instead due to a downgrade in the issuer’s credit rating. Therefore, by buying ETNs, investors get direct exposure to the credit risk of the issuer and would only have an unsecured bankruptcy claim if the issuer declares bankruptcy. The principal amount is subject to the periodic application of investor fees or any applicable fees that can adversely affect returns. Where you trade ETNs with underlying assets not denominated in local currencies investors are also exposed to exchange rate risk. Currency rate fluctuations can adversely affect the underlying asset value, also affecting the ETN price.

Investors may have leveraged exposure to the underlying index, depending on the product feature. The value of ETNs can change rapidly according to the gearing ratio relative to the underlying assets. You should be aware that the value of an ETN may fall to zero resulting in a total loss of the initial investment.

Leveraged & Inverse Products (L&I)
1. Investment risk
Trading L&I Products involves investment risk and are not intended for all investors. There is no guarantee of repaying the principal amount.

2. Volatility risk
Prices of L&I Products may be more volatile than conventional exchange traded funds (ETFs) because of using leverage and the rebalancing activities.

3. Unlike conventional ETFs
L&I Products are different from conventional ETFs. They do not share the same characteristics and risks as conventional ETFs.

4. Long-term holding risk
L&I Products are not intended for holding longer than the rebalancing interval, typically one day. Daily rebalancing and the compounding effect will make the L&I Product’s performance over a period longer than one day deviate in amount and possibly direction from the leveraged/inverse performance of the underlying index over the same period. The deviation becomes more pronounced in a volatile market.

As a result of daily rebalancing, the underlying index’s volatility and the effects of compounding of each day’s return over time, it is possible that the leveraged product will lose money over time while the underlying index increases or is flat. Likewise, it is possible that the inverse product will lose money over time while the underlying index decreases or is flat.

5. Risk of rebalancing activities
There is no assurance that L&I Products can rebalance their portfolios on a daily basis to achieve their investment objectives. Market disruption, regulatory restrictions or extreme market volatility may adversely affect the rebalancing activities.

6. Liquidity risk
Rebalancing typically takes place near the end of a trading day (shortly before the close of the underlying market) to minimize tracking difference. The short interval of rebalancing may expose L&I Products more to market volatility and higher liquidity risk.

7. Intraday investment risk
Leverage factor of L&I Products may change during a trading day when the market moves but it will not be rebalanced until day end. The L&I Product’s return during a trading day may be greater or less than the leveraged/opposite return of the underlying index.

8. Portfolio turnover risk
Daily rebalancing causes a higher levels of portfolio transaction when compared to conventional ETFs, and thus increases brokerage and other transaction costs.

9. Correlation risk
Fees, expenses, transactions cost as well as costs of using financial derivatives may reduce the correlation between the performance of the L&I Product and the leveraged/inverse performance of the underlying index on a daily basis.

10. Termination risk
L&I Products must be terminated when all the market makers resign. Termination of the L&I Product should take place at about the same time when the resignation of the last market maker becomes effective.

11. Leverage risk (for leveraged products only)
The use of leverage will magnify both gains and losses of leveraged products resulting from changes in the underlying index or, where the underlying index is denominated in a currency other than the leveraged product's base currency, from fluctuations in exchange rates.

12. Unconventional return pattern (for inverse products only)
Inverse products aim to deliver the opposite of the daily return of the underlying index. If the value of the underlying index increases for extended periods, or where the exchange rate of the underlying index denominated in a currency other than the inverse product's base currency rises for an extended period, inverse products can lose most or all of their value.

13. Inverse products vs short selling (for inverse products only)
Investing in inverse products is different from taking a short position. Because of rebalancing, the performance of inverse products may deviate from a short position in particular in a volatile market with frequent directional swings.

Securities denominated in Renminbi (RMB)
RMB is not freely convertible. Conversion between RMB and foreign currencies (including Hong Kong dollar) is subject to PRC regulatory restrictions which may affect the liquidity of the RMB denominated securities.

As RMB denominated securities may have regular trading or an active market. Therefore you may not be able to sell your investment on a timely basis, or you may have to sell the product at a deep discount to its value.

The Hong Kong dollar value of your investment will go down if the RMB depreciates against the Hong Kong dollar.

I-Access is licensed by the SFC to provide automatic new share trading system for our clients to trade new shares before listing. I-Access New Share Board allows clients to choose to sell securities allotted from the open offer applications earlier. Interested buyers can also add their holdings using the New Share Board.

Basically, all shares or securities to be listed will be introduced in I-Access New Share Board after completion of their public offer process. Trading in the New Share Board will be open for clients on the trading day before listing.

Trading hours

Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect provide an unprecedented cross-market trading mode for I-Access clients to buy and sell selected A shares listed on the Shanghai Stock Exchange and the Shenzhen Stock Exchange. Board lot of Mainland A shares is 100 shares. All buying quantities must be 100 shares of integral multiples thereof. Selling quantities have no such restriction.

Trading hours
Mainland securities market is open Monday to Friday (except Mainland or Hong Kong public holidays and settlement days on Hong Kong public holidays).

Clients may enter limit orders, change or cancel limit orders not placed to the market any time.

Limit order
Limit order lets the client to set a price level, where the matching prices will be equal to or better than that level. E.g. the bought trade prices should be lower than or equal to the input price. Clients can also set the effective period, so before that, the unmatched portion will be sent to the market every day until complete execution or cancelled by clients. Limit orders entered before the auction period will be placed during the auction period, while limit orders entered after the market close will be regarded as next-day orders.

Market order
Market order is executed at market prices. Market bid (ask) order will match with the best ask (bid) orders in the market, so client need not enter any order price. Market orders can only be placed during continuous trading period. Depending on the number of queuing orders in the market, most of the market orders are fully traded, but there is no guarantee of full match. Unmatched market orders will be automatically cancelled. If the order quantity is very large, a market order may match with a number of orders in the market.

H/A share dual trading
Some Shanghai and Shenzhen A shares have H shares listed on Hong Kong. I-Access provides simultaneous quotation and trading function for H/A share pair. Clients may choose HK$ or RMB for quotation to compare directly share prices of H and A shares to decide to buy at the lower price, and sell at the higher price.

Stop order
When a client holds a particular security, he/she can set a stop order. When the security price falls to the trigger level, the order will sell the security using a market order or a limit order (at price trigger minus tolerance). Client can also set the effective period, so before that, the unmatched portion will be sent to the market every day until complete execution or cancelled by clients.

Trigger order
Trigger order is a conditional instruction, including a trigger price and an order price. The trigger condition client can choose includes up or down trigger: only when the nominal price from below the trigger price rises to or above the trigger price in case of up trigger, or falls from above the trigger price to or below the trigger price in case of down trigger, a limit order is sent to the market. Otherwise, the trigger order is only in a standby status. Trigger order can be used for stop loss, stop gain or price chasing.

OCO order
OCO order is another conditional instruction, including a first order price, trigger price and a second order price. OCO order is a combination of a limit order and a trigger order. After placing, the limit order with the first order price will be sent to the market. When the trigger order is triggered, the first limit order will be cancelled, and then the second limit order will be sent to the market. If the first limit order is fully matched, the trigger order will be automatically cancelled. OCO order can be used for stop gain and stop loss or price changing.

If-then order
If-then order is a combination order with one buy order and one sell order. The instruction includes a buy limit price and a sell limit price. The buy order will be executed first, and the sell order on the bought quantity will be sent to the market automatically once the buy order is fully matched. If-then order can be used for short-term trading, spread trading, and stop gain. Day trading is not allowed for Shanghai and Shenzhen A shares, so the selling shares must be purchased on the previous trading day or before.

If-OCO order
If-OCO order is again a combination order with one buy order and one sell order. The sell order is set to be an OCO order. The instruction includes a buy limit price, the first sell limit price, trigger price and the second sell limit price. The buy limit order will be placed to the market in the first place. When it is completed, the first sell limit order will be automatically sent out to sell the quantity purchased. If this sell order is fully matched, the trigger portion is cancelled; however, if the nominal price falls to the trigger level, the second sell order will be released to replace the first sell order to sell the unmatched part of the order. If-OCO order is used for short-term trading with stop-gain-and-loss feature. Day trading is not allowed for Shanghai and Shenzhen A shares, so the selling shares must be purchased on the previous trading day or before.

Notes for investing Mainland A shares
Difference in trading day and trading hours
Shanghai Stock Connect and Shenzhen Stock Connect allow trading on days when both Hong Kong and the respective Mainland exchanges are open for trading, and banking services are available in both markets on the corresponding settlement days. A share trading follows the same trading hours of the exchange where it is listed.

Investor ID Model
Trading through Shanghai Stock Connect and Shenzhen Stock Connect adopts Investor ID Model. Client must confirm terms of the ID Model before you can trade Mainland A shares. Client can transact in Mainland A shares 2 trading days after confirmation.

Daily quotas
Shanghai Stock Connect and Shenzhen Stock Connect are subject to daily quotas. When net purchase (including all buy orders, matched or unmatched, minus matched sell orders) exceeds the daily quota, clients cannot input new buy orders or change existing buy orders for the remaining day, but you can cancel existing buy orders. Sell orders are not restricted by the daily quotas.

Disclosure of shareholding
If client holds 5% or more of the issued A shares, you are required to disclose your shareholding to the relevant authorities in the Mainland.

Shareholding limits
Shanghai Stock Exchange and Shenzhen Stock Exchange have imposed shareholding limits on foreign investors. The limit for individual shareholding is 10% of the issued A shares. That for the aggregate shareholding by all foreign investors is 30% of the issued A shares. As client may trade and hold A shares at different financial institutions, you have to work out the total shareholding yourself to avoid breaking the individual shareholding limit. If the shareholding of all foreign investors exceeds 30% of the issued A shares, the relevant authorities in the Mainland may require force-sale of the A shares over the limit. If so, your holding of such A shares may be required to be sold.

No protection by Investor Compensation Fund
A shares traded under Shanghai Stock Connect and Shenzhen Stock Connect are not covered by Hong Kong's Investor Compensation Fund, nor are they protected by China Securities Investor Protection Fund.

Margin trading provides leveraged securities investment: when security price goes up (down), profit (loss) made will be multiplied. If clients want to participate in margin trading, you must first activate Margin Account. Margin trading can be either of the following two modes:

1.	Deposit cash to purchase marginable stock
	If the stock under purchase has a margin rate of 70%, only deposit the cash amount of 30% of stock value (plus transaction costs) to buy the stock at Margin Account. For Cash Account, it is required to have purchase fund of 100% of stock value to buy the same amount of stock. Margin trading increases the purchase power to 3 times or more.
2.	Deposit marginable stock to buy other securities
	If there is marginable stock at Margin Account, the marginable value of the stock is granted as credit limit. Clients may use the residual credit limit to buy any listed securities as long as the debit balance of Margin Account does not exceed the marginable value.

Basically, margin rates are based upon the stock's risk and turnover. Adjustment may be made for a particular stock due to latest news from the listed company. The margin rate of a stock is also displayed on the quotation screen. If clients want I-Access to include a stock to be marginable, you may send your proposal by email to I-Access.

Leverage Effect
Clients enjoy the following advantages by margin trading:

1.	To investors of limited fund, margin trading allows you to purchase quality stock at an amount as low as 30% of stock value. In addition, the list of stocks that can be purchases is extended, providing more choices in securities investment.
2.	Using the same sum of money, margin trading can buy a maximum of 3 times the quantity that can be bought by cash trading. Mores shares means more dividends, enhancing the holding return.
3.	When the price of the stock held rises, the profit made by margin trading will be a multiple times of that by cash trading. In case of low loan interest rates, margin trading can protect against inflation.

However, the leverage effect also magnifies the losses. Investors must understand the risks involved before using Margin Account to trade.

Margin Call
If the debit balance at Margin Account exceeds the marginable value of the portfolio at the same account after market close, I-Access will issue a margin call notice by email to the concerned client on the same day. The client should deposit the called amount before market opens on the following day, or else the securities at Margin Account may be under force sale.

Force Sale
When the following situation happens, I-Access may force-sell the securities at Margin Account:

Margin call notice has been issued	AM	Debit balance at Margin Account exceeds the upper limit of the marginable value (based on margin rates plus 10% but not exceeding 90%)
	PM	Debit balance at Margin Account exceeds the marginable value (based on margin rates)
Margin call notice has not been issued	Whole day	Debit balance at Margin Account exceeds the unconditional force sell level (based on margin rates plus 20% but not exceeding 95%)

To prevent force sale, margin trading clients may deposit sufficient fund, transfer stock from Cash Account, or sell the securities at Margin Account, when the debit balance at Margin Account is close to the marginable value.

PRC A Share Margin Trading
Only A shares in the list of Eligible Shanghai Stock Exchange ("SSE") or Shenzhen Stock Exchange ("SZSE") Securities for Margin Trading can be allowed for margin trading.

If the volume of margin trading activities in respect of any eligible PRC A shares exceeds the margin trading threshold prescribed by SSE or SZSE, and SSE or SZSE decides to suspend or has suspended margin trading activities in such A shares, clients cannot place margin orders for such A shares until SSE or SZSE announces to resume margin trading activities in such A shares.

Power trading is session or day trading in securities. Stock purchased at Power Account will be automatically sold within 5 minutes before session or day end. When client activates Margin Account, Power Account is also activated. Before using Power Account to trade, client has to deposit fund from Cash Account. For every $1 deposited, there will be $10 more credit at Power Account. Therefore, the maximum gearing ratio of power trading is 11x. Day order is the stock purchased in the morning, which can be sold any time during the day; session order allows stock to be purchased and sold in the am session. All day orders in the pm session are regarded as pm session orders.

Power Up
Because the day volatility of quality stock is small, power trading with a leverage as high as 11 times can greatly increase the yield. As the stock is transacted, power trading is much closer to the market than warrants or CBBCs. Also, the profits paid to issuers of these instruments are excluded. Besides, liquidity of quality stock is high with queues of bids and asks always in the market. The bid-ask spread normally is one price spread. Compared with warrants or CBBCs that require issuers to quote their prices, the transaction prices for power trading are fairer.

As transactions at Power Account are day trading, no interest is charged by I-Access.

Power trading incorporates the auto-sell mechanism to prevent clients from suffering from overnight market risk. Notwithstanding this, if the stock is suspended from trading or there are insufficient bid orders in the market, resulted in unsold stock, the reminder will be transferred to Margin Account after market close. The cash balance at Power Account will be automatically transferred back to Cash Account at day end.

Force Sale
If the loss in the portfolio at Power Account is over half of the fund deposited, force sale is triggered. All stocks at Power Account will be sold. When there is only cash left at Power Account, client may use Power Account to trade again.

Power Trading Securities
Only stocks or ETFs can be selected as power trading securities. Power multiple means the extra value that can be purchased using every $1 deposited. The power multiples for session or day orders are different for different securities according to their risk. The maximum power multiple is 10x, and the minimum is 2.5x.

Hong Kong traded futures include index futures, sector index futures, stock futures, gold futures, dividend futures, currency futures, interest rate futures, volatility futures and Treasury Bond futures. Each type of futures has different trading hours and expiry days. Futures is a kind of high-risk derivatives products, so clients must understand its nature before trading. The potential loss may exceed the amount of the original margin paid.

Trading hours
Hong Kong futures market is open Monday to Friday (except public holidays).

Limit order
Limit order let the client to set a price level, where the matching prices will be equal to or better than that level. E.g. the bought trade prices should be lower than or equal to the input price. Limit orders entered before the auction period will be placed during the auction period, while limit orders entered after the market close will be regarded as next-day orders.

Auction order
Only HSI futures, HHI futures, HTI futures and mini-index futures have auction period. Auction order is matched at the final Calculated Opening Price (COP is the price to match the largest quantity), so clients need not enter any price. Auction order can only be placed during auction period. Auction orders have a higher priority than limit orders, but there is no guarantee of full match. Unmatched auction orders will be changed automatically to limit orders at the final COP.

Market order
Market order is executed at market prices. Market bid (ask) order will match with the best ask (bid) orders in the market, so client need not enter any order price. Market orders can only be placed during continuous trading period. Depending on the number of queuing orders in the market, most of the market orders are fully traded, but when liquidity is particularly low or the market is very volatile, there is no guarantee of full match of a market order. Unmatched market orders will be automatically cancelled immediately at the time of submission to market.

Trigger order
Trigger order is a conditional instruction, including a trigger price and an order price. The trigger condition client can choose includes up or down trigger: only when the nominal price from below the trigger price rises to or above the trigger price in case of up trigger, or falls from above the trigger price to or below the trigger price in case of down trigger, a limit order is sent to the market. Otherwise, the trigger order is only in a standby status. Trigger order can be used for stop loss, stop gain or price chasing.

OCO order
OCO order is another conditional instruction, including a first order price, trigger price and a second order price. OCO order is a combination of a limit order and a trigger order. After placing, the limit order with the first order price will be sent to the market. When the trigger order is triggered, the first limit order will be cancelled, and then the second limit or market order will be sent to the market. If the first limit order is fully matched, the trigger order will be automatically cancelled. OCO order can be used for stop gain and stop loss or price changing.

Close instructions
There are the following choices to close a position:

1.	Basic stop	Stop price unchanged;
2.	Trailing stop	Stop price change with market;
3.	Stop gain	Stop gain order is placed after complete match; or
4.	Stop gain & loss	Stop gain order and basic stop loss order.

Futures and option night market is a trading session after day close of the day market, starting from 5:15pm to next dawn 3:00am. Currently, HSI futures and options, H-share index futures and options, HTI futures, mini-HSI futures and options, mini-HHI futures and options, RMB futures, MSCI futures and London metal mini-futures are available for night trading.

The night market has the following features:

1.	When night trading opens, the unmatched orders placed at daytime, if set to be night orders, will be effective during the night market. For orders not set to be night orders, they will be cancelled before night market opens.
2.	The highest and lowest futures prices at night market must be within the range of 5% from the last transacted prices at close of day market. If the nominal futures price has reached the upper or lower limit, the futures trading will not be suspended but the transacted prices cannot exceed the price range. If the best bid price of the index futures reaches the upper limit or the best ask price reaches the lower limit, trading in all the related index options will be suspended for that night.
3.	As there is no market for stock during the night session, futures and option prices are mainly affected by markets in Europe and the U.S., and news released by listed companies after day closes.

Except for option strategy instructions which are good till night close, I-Access clients when placing orders during day session must select the appropriate order class. If the order is supposed to be remained in the market during the night session, the "till night" instruction should be chosen. These orders are effective from the time of placement till close of night market. However, the stop gain and/or stop loss setting of all orders will be still effective at night to increase the opportunity to close a position during the night market.

Regardless of any trading at night, if the account equity is not enough, or the margin call notice email is received after day market closes, force closure may take place in the night session if the account has open position in contracts that can be traded at night.

Although RMB options are not traded in the night market, all related positions' floating profits or losses are worked out based on the transacted prices in the night market. If the account equity is below the maintenance margin using the last transacted prices in the night market, the client will also receive the margin call notice email after night closes.

Hong Kong traded options include index futures, stock options and RMB options. Index and currency options are of European style and settled in cash; stock options are of American style, physically settled. Option is a kind of high-risk derivatives products, so clients must understand its nature before trading. The potential loss of buying an option is the premium, while that for a short position may exceed the amount of the original margin paid.

Trading hours
Hong Kong option market is open Monday to Friday (except public holidays).

Limit order
Limit order let the client to set a price level, where the matching prices will be equal to or better than that level. E.g. the bought trade prices should be lower than or equal to the input price. Limit orders entered after the market close will be regarded as next-day orders.

Market order
Market order is executed at market prices. Market bid (ask) order will match with the best ask (bid) orders in the market, so client need not enter any order price. Market orders can only be placed during continuous trading period in the day market. Depending on the number of queuing orders in the market, most of the market orders are fully traded, but there is no guarantee of full match. Unmatched market orders will be automatically cancelled.

Block order
Block order can be placed for a limit order of 500 or more option contracts, which may be executed with I-Access as the counterparty if the order price is acceptable. Block orders can only be placed during continuous trading period in the day market. There is no guarantee of execution of block orders. Unmatched block orders will be automatically cancelled at day close.

Close instructions
There are the following choices to close a position:

1.	Basic stop	Stop price unchanged;
2.	Stop gain	Stop gain order is placed after complete match; or
3.	Stop gain & loss	Stop gain order and basic stop loss order.

Option exercise
As index options are of European style, they will be automatically exercised on expiry. Stock options can be exercised on or before expiry, so players with stock option short may be assigned before expiry. Holding in-the-money short option position has the risk of early exercise.

Portfolios of options can have thousands of combinations, which may gain the greatest profit under different market circumstances. If client wants to create an option strategy, you can buy or sell each contract separately. This takes longer time, and prices of some contracts may fluctuate when market conditions change, which may deviate from the expected cost. I-Access understands the need of our clients to form the derivatives portfolio concurrently, so the option strategy trading function is introduced to allow clients to design your own option portfolios to be traded any time in one lot to capture the instant opportunity.

Other than increased investment alternatives, the following are the advantages using derivatives portfolio:

1.	Portfolio margin must be lower than that for a single contract;
2.	Risk can be adjusted more flexibly; and
3.	Certain combinations are designed for volatility change.

I-Access "option strategy" trading mode brings a more convenient way to form option portfolios and demonstrate their advantages. The following introduces the functions of I-Access "option strategy" trading function:

Strategy portfolio payoff diagram

ISSNet displays for our clients the option portfolio payoff diagrams in textbooks. Payoff diagram is updated whenever client changes the portfolio contract, allowing you to visualize the strategy performance under different settlement prices. Payoff diagram has taken into account the cost in opening the position, so the profile is the final net income of the strategy.

Preset various strategies at your choice

Clients can preset desired derivatives portfolios, saved for future use. You only need to enter the strategy code saved for immediate trading, simple and fast.

Strategy including derivatives contracts of same class and same month

A set of option strategy may include up to four different option contracts. It is easy to add or delete any contract.

Reverse button for the close portfolio

After the "reverse" button is pressed, the buying contracts are changed to selling ones, and vice versa. The close portfolio need not enter anything to form.

Q button to request quotes for all option contracts

ISSNet will make quote requests for all contracts without bid or ask prices when the "Q" button is pressed. When the prices of all contracts exist, the strategy market price will display automatically. The strategy market equals the sum of buying contract price x quantity minus the sum of selling contract price x quantity. For example, for the portfolio in the diagram, if the price of HSI21000C1 is 200, and that of HSI22000C1 is 150, the strategy market price is 200 - 150 = 50. If the sum of selling contract prices is greater than that of buying contracts, the strategy market price can be a negative figure (shown in red digits). In special cases, the sum of selling contract prices is the same as that of buying contracts. Then the strategy market price is zero. This is called zero-cost strategy. Zero cost strategy is not zero cost indeed - the margin and option premium have to be paid.

The following are some examples of strategy portfolios:
Bull spread

Suitable for slightly bullish market, and less risky than short option.

Bear spread

Suitable for slightly bearish market, and less risky than short option.

Straddle

Buying a straddle is suitable in directionless volatile market situation.


Selling a straddle is suitable in directionless and stagnant market situation.

Strangle

Buying a strangle is suitable in directionless and very volatile market situation, e.g. financial tsunami or real tsunami.


Selling a strangle is suitable in directionless but less volatile market situation.

Butterfly

A butterfly strategy is composed of three option contracts. It is suitable for directionless and stagnant market situation. This strategy is less costly than a straddle or strangle. As shown in the diagram, the maximum profit can be 2.6 times the initial cost, but the risk is very limited.

More complex strategies
Option strategy can be formed by the option contracts of the same month, including call and put options, selling or buying, contract quantity from 1 to 10. A maximum of four contracts can be chosen. This can have thousands of different combinations. The payoff diagram shows the profitable region, amount of profit, and maximum possible loss. Clients can design the most suitable portfolio in order to obtain the highest possible gain. However, the option strategy must be one of the prescribed kinds accepted by the exchange to be eligible for trading; otherwise, the strategy order will be rejected by the exchange.

Although clients can form the above strategies by trading the contracts separately, I-Access option strategy trading mode has the following advantages:

1.	All contracts are matched concurrently
	When the price is right, all the contracts in the same strategy are matched at the same time.
2.	Lower initial margin
	To trade the contracts one by one, the margin requirement is higher. Using the option strategy trading mode, the initial margin is the margin for the whole portfolio, which is lower than margins of inidividual contracts.
3.	Faster entry
	Option strategy trading mode allows clients to save the strategy, which can be loaded for order entry any time.
4.	Easier to close position
	The "reverse" button in option strategy trading mode can form the close portfolio immediately, simplifying the procedure.
5.	Separate strategy portfolio
	Contracts using strategy to trade are presented in a separate portfolio from those traded individually, and the two portfolios will not close one another. Clients can view the performance of different portfolios orderly, and they are also shown in separate sections in statements.

Option strategy trading mode is applicable to spot and next month contracts of HSI options, mini-HSI options, HHI options, and mini-HHI options.

Fast buttons for two-option strategies

The above-mentioned strategies formed by two different option contracts can now be entered simply by pressing the fast buttons in the option trading window. These strategies can be placed to the market faster and more convenient. The fast buttons represent the strategies of bull spread, bear spread, buying straddle, selling straddle, buying strangle, selling strangle, selling calendar spread, and buying calendar spread in order.

Option strategy trade disclosure
Option strategy orders will be transacted at the trading system of the HKEx. The portfolio price must satisfy the exchange trading rules, and will not be worse than the combined market prices of individual contracts. If the client's option strategy order price is already the same as or higher than the market price of the portfolio, and there is no counterparty order in the market, I-Access may be the ultimate counterparty of the order.

Force closure for option strategies
Client should note that the portfolio margin by using option strategy trading is lower than that for a single contract, force closure will take place as the margin requirement is changing with the market. For force closure situation, I-Access will close an option portfolio in the open market by single contract. In general, the contract which suffers the largest loss is closed first.

Expecting a higher investment yield, but regarding risk of derivatives like options too large, I-Access clients can choose "equity-linked put options" (ELPO). ELPO is the short position in the HKEx stock put options. Client only pays the collateral = (strike - option premium) to receive the value of strike at expiry, or linked stock converted at strike.

The annual yields of ELPO range from 10% to 50%, with yields growing with the underlying stock price volatilities.

Annualized yield is calculated as follows:

Annual yield = Option premium / Collateral x 365 / Number of days to expiry

However, when the option counterparty exercises the put options, client will receive the underlying stock instead. Normally, only if the stock price is lower than the strike at expiry will the option counterparties exercise; seldom, the counterparties may also exercise at any stock price or before expiry. Therefore, it is probable to receive the linked stock before expiry, or the same happens when the stock price is merely higher than the strike. As option exercise bears transaction costs, if the stock price is only barely below the strike, some option counterparties may deny exercise at expiry, and the holders of ELPO will receive the strike.

The following is a real example of ELPO:

Linked stock	#00005 HSBC Holdings
Stock price	HK$83.25/share
Trading date	6 Jan
Contract	HSBC Jan 82.50 Put Option
Strike	HK$82.50/share
Option premium	HK$0.83/share
Multiplier	400 shares
Collateral	HK$81.67/share HK$32,668/contract
Expiry date	29 Jan
Expiry value	HK$82.50/share HK$33,000/contract
Days remaining	23 days
Annual yield	16.13%

Client holding the above ELPO contract has to pay HK$32,668 as collateral (excluding transaction costs) on 6 Jan. If the counterparty does not exercise, the client can receive HK$33,000 (excluding transaction costs) on the expiry date (29 Jan), earning HK$332 with an annual yield of 16.13% (if I-Access transactions costs included, annual yield is 15.50%). When the counterparty exercises (i.e. HSBC Holdings share price falls below HK$82.50 at expiry), the client will receive one board lot of HSBC Holdings shares instead.

From the above example, ELPO provides clients with yields much higher than those of time deposits. With the low fees collected by I-Access, the net yields are also very attractive. Though there is a chance of exercise by counterparty, the stock received is of very high quality. It may be sold later at better prices, or held as long-term investment.

To choose ELPO, the first step is to decide the linked stock. Normally, the stock should be the desired one of client. Then, the choice of strike is also important. Lower strike has a higher chance to get yield, but the yield is also reduced; conversely, higher strike gives higher yield, but the chance of assignment to take the stock increases at the same time. If a client wants to get the cash yield, ELPO with strikes lower than nominal stock price should be traded. On the other hand, when ELPO is used to purchase the linked stock at price lower than its nominal, strikes higher than nominal should be considered.

Although ELPO and selling put option are both short positions in the HKEx stock put options, the following are the differences between them:
1. ELPO has no margin call, nor force closure;
2. Stock received under ELPO will not be sold due to deficiency of fund;
3. Strike choices for ELPO are fewer, mainly include those close to stock price.

Clients holding ELPO usually hold them till expiry; they may elect to close them before expiry, but have to suffer from the bid-ask spread loss.

Futures contracts are settled on expiry days. If clients want to extend the holding period, they have to rollover to a farther month contract. Or, if clients want to trade a far month contract, however, due to the low liquidity of the far month contract, they use the spot month contract to lock the price, and then rollover to that far month contract later. Inter-month spread contracts used for rollover can also be traded independently.

If a client holds a long position in the spot month contract, and wants to rollover to next month contract, he/she should buy a spot/next inter-month spread contract. In his/her portfolio, the spot month adding the inter-month spread contract will become the next month contract, and the new price will be the sum of the spot month contract and the spread price. For short position, you should sell the corresponding inter-month spread contract instead.

Clients may place limit or market order to transact inter-month spread contracts. The best time to rollover is the third to fifth trading days before expiry, when it is the most active days for rollover trading, and the rollover price is fair. However, if the market price is acceptable, clients may take an early move. Using inter-month spread contracts for rollover can prevent price fluctuation because the spread contract is a combination of contracts of two months. During the active days of rollover, inter-month spread contracts may have higher liquidity than their underlying contracts, resulting in a more stable price. Finally, if a client has a long position, buying the same quantity of inter-month spread contracts will not effect any margin call. Conversely, if the client closes the long position first, and then reopen the long position in the next month contract, the margin will be re-calculated. In case of insufficient fund, the next month order may be rejected, failing the rollover.

The fair value of inter-month spread contract is the fair value of far month contract minus that of near month contract. If the fair value of the far month contract is lower, the fair value of the spread contract can be a negative figure.

Odd lot is a quantity less than one board lot. E.g. if a board lot consists of 1,000 shares, for quantities from 1 share to 999 shares are called odd lots. As HKEx does not provide automatic match for odd lot orders because an odd lot trade must match both the quantity and the price. In other words, odd lot execution does not have any partial match, or else, the transaction costs to the client will be very high. Odd lot transactions are handled manually, so the time taken is longer. Because of the low liquidity of odd lots, the bid-ask spread can be as wide as 5-10 price spreads.

I-Access is licensed by the SFC to provide automatic odd lot trading system for our clients to trade listed stocks in odd lots with I-Access as the counterparty. Clients can trade stocks under one board lot during market opens freely without any manual process. For stocks not yet quoted for odd lot trading, clients may input their stock codes to request I-Access to add them in the Odd Lot Board.

Monthly plan allows I-Access clients to purchase large value quality stocks by installment, enjoying the benefit of price average purchase. Once the plan is confirmed, client only has to deposit sufficient fund before the buy day, I-Access will automatically purchase the assigned number of shares on the buy day. As monthly plan aggregate a number of clients buying the same stock, if the total number reaches one lot or more, the purchase price may be lower than the odd lot price.

Stocks under the monthly plan include all the stocks traded in the I-Access Odd Lot Board. Reference can be made to the stock list in the "Odd Lot Trading" section. Clients can apply for monthly plan for each of the stocks in the list simultaneously, ensuring enough fund on the buy day. Purchased shares under the plan are added to the portfolio. If needed, clients may sell the shares at the I-Access Odd Lot Board for cash.

In addition to the fixed amount for monthly plan, there is a new choice of fixed quantity. Fixed amount refers to monthly installment of HK$500 or its multiples. Fixed quantity means the number of shares bought per month is constant, with the minimum initial market capitalization of the shares is HK$500. The period for a monthly plan can be from 2 months to 1 year.

The service fee for a monthly plan is HK$5 per month per stock. (i-pons are not applicable to monthly plan.) The service fee for the whole plan period is collected at confirmation of the plan. I-Access monthly plans allows clients to alter or cancel (except on the buy day) the plans. Clients must note that service fee already paid will not be refunded due to the cancellation or shortening of the plan. If clients extend the monthly plans, I-Access will collect the extra service fee when the extension is confirmed. All effective monthly plans will be shown on statements.

The fixed amount under a monthly plan is used for buying stock only. Other charges like stamp duty will be deducted from the account. Except for stamp duty to be calculated one by one, all third party charges will be collected from the clients involved on the basis of the quantities allocated. Only integral number of shares are purchased. Amount not enough to buy 1 share will be returned.

The buy day is set to be the 5th day of each calendar month. I-Access will buy the stocks under the monthly plans in the period from 11 a.m. to 12 noon. If the 5th day is not a trading day, the buy day will be postponed to the next trading day. In case of typhoon, rainstorm, suspension or other reason(s) rendering the 5th day impossible to purchase the stock, the buy day will be postponed to the next trading day. The final buy day is set to be the 15th day of the month. If, for whatever reason (such as prolonged suspension), a stock cannot be purchased from the exchange market from the 5th to 15th day, the buy day for that stock in that month is cancelled. The service fee for the month for that stock will be refunded to the relevant clients with effective monthly plans on that stock.

Clients joining the monthly plans must ensure that there is sufficient tradable fund in the accounts. If the account cash is not enough by 11 a.m. on the buy day, I-Access will not execute the buy order under the monthly plan. If a client has joined a number of monthly plans for different stocks, and the account fund is not sufficient for all the plans, I-Access will decide the stocks under the plans that the account fund is enough to pay; the remaining plans with insufficient fund will not be executed. If the monthly plan is not executed due to insufficient fund, the service fee related to that purchase will not be refunded.

Clients can also set the target quantity. One objective of the target is to prevent odd lot when the plan completes. Monthly plan will be terminated when the target quantity is purchased. As the service fee is based on the plan period, target quantity set to be too low may shorten the plan period, but the service fee for the remaining period will not be refunded. So, clients must calculate carefully the target quantity to prevent from paying excessive fee.

Other than expiry of the monthly plan, any one of the following events may also terminate the plan automatically (remaining service fee will not be refunded for early termination):
1. The purchased quantity has reached the target one;
2. The stock is delisted due to merger/acquisition, privatisation or other reason;
3. The client account is suspended from trading;
4. The client has closed the I-Access investment account.

There are a number of ways to subscribe for shares of the newly listed companies:

White form application
All new shares available for public subscription can be applied by white form. Clients may come to I-Access head office or one of the branches to get the IPO white form, staple a cheque after completing the form, and place it into the collection box at the designated bank branches before deadline to make an application. The cheque used for the application must bear the name of the applicant.

Although white form application does not incur any expense, there are a number of inconveniences:

White form eIPO
This is an eIPO service provided by Computershare Hong Kong Investor Services Limited. As the listed company has to appoint Computershare Hong Kong Investor Services Limited to provide the service, not all new listings have white form eIPO.

White form eIPO saves the burden of obtaining and lodging the application form. Applicants only need to transfer the application amounts before the deadline at noon using Internet banking. This payment method allows applicants who do not have any cheque accounts to pay the application by fund transfer from own or relative's or friend's bank account. However, physical share certificates under successful application will be sent to the applicant by mail, so postal delay and scrip deposit still hold. In addition, as online fund transfer usually has a limit, white form eIPO is not suitable for large applications.

Application through I-Access
I-Access clients can apply new shares, enjoying the following benefits by paying a charge of HK$5.5:

Moreover, I-Access IPO service has the following outstanding features:

I-Access is one of the data vendors approved by the HKEx to distribute realtime securities trading data to clients.

Eligible clients can enjoy unlimited Basic Market Price service (non-streaming) for realtime securities price information. This quotation service aims to provide investors with some basic market information for reference. Clients who need more detailed market information for investment decision should consider the following charge realtime streaming quotation service.

The monthly fee of the realtime quotation plan of I-Access is only HK$210 to enjoy the following services:

The main services offered by I-Access are provided through the Internet. Currently, the following counter services are provided at I-Access head office and branches:

Account opening
Bringing your ID card or passport, and address proof within 3 months to any one of I-Access counter, you can open the account in person.

Deposit
Clients can deposit cheques or drafts at our counters.

Scrip in/out
Clients can deposit share certificates at our counters. To withdraw stock scrip, first you have to enter the stock, quantity and choose the head office or any one of the branches to get the certificates. I-Access will notify the drawing client when the certificates are available for collection. The client must bring with identity document in person to complete the withdrawal process.

Information change
If the personal information is changed, clients have to come to our counters to update the record.

Technical support
If clients cannot use ISSNet or ISSNet Mobile due to certain hardware problem, you may bring the hardware in question to I-Access head office. Our technical staff are happy to solve the problem or provide any alternative for you.

Service enquiry
If any clients or investors are interested in any investment services provided I-Access, our staff will definitely give you a satisfactory answer.

Logon to ISSNet
If clients cannot logon to ISSNet in case of hardware or network breakdown, we have some facilities at head office or branches for you to logon to ISSNet.

Fund deposit
Client may use the following ways to deposit HK$ fund:

Client may use the following ways to deposit RMB fund:

Client may use the following ways to deposit USD fund:

Notes to cash deposits
Clients who make cash or non-cheque deposits directly into the abovementioned I-Access bank accounts may be subject to large cash deposit charge or non-cheque deposit process charge. I-Access will deduct the same amounts from the clients' I-Access accounts to pay for the bank charges. To avoid such charges on your deposits, clients should use cheques or transfers. For cash deposit, clients should pay attention to the banks' definitions of large cash deposit.

Client can deposit cash (in any currency) at bank counter once per day.

The daily limit of cash deposit is HK$50,000 or exchange equivalent in non-HK$ currency for each client.

If a client deposits cash at bank counter more than once in one day, I-Access will return all cash deposits following the first one to the client's bank account registered with I-Access; if the total cash deposit (through ATM or bank counter) of a client in one day exceeds the HK$50,000 limit, I-Access will return the portion over the limit to the client's bank account registered with I-Access. If the cash deposit is in a currency other than HK$, and the client does not register any bank account in such currency with I-Access, the returned amount will be converted into HK$ at the exchange rate offered by I-Access, and then deposit into the client's bank account registered with I-Access.

Fund withdrawal
Clients can withdraw fund through ISSNet or ISSNet Mobile. For withdrawal made before 9am on any business day, I-Access will deposit to the withdrawing client's registered Hong Kong bank account by crossed cheque or electronic transfer. Client can receive the fund on the same or next business day at your bank account. For overseas bank account, I-Access will remit the fund into that account, and collect the remittance fee at your I-Access account (or if insufficient, from the withdrawal amount).