Financial Futures Margin & Contract Specifications

What Are Financial Futures?

Financial futures track an underlying Financial & Insurance Sector Stock Price Index (commonly referred to as the Financial Index). This index is an industry classification index compiled by the Taiwan Stock Exchange (TWSE) and is designed to measure the overall share price performance of Taiwan’s financial, banking, securities, and insurance companies.

The Financial Index is calculated using a market capitalization–weighted methodology. Companies with larger market capitalization have a greater influence on index movements. As a result, large financial holding companies such as Fubon Financial and Cathay Financial—which have very high market values—often account for a substantial portion of the index’s overall direction.

Factors Affecting the Financial & Insurance Sector Index

1. Central Bank Interest Rate Policy

Interest rates are the lifeblood of financial stocks, but their impact varies across sub-sectors:

• Banking: Generally benefits from rate hikes, as higher rates widen net interest margins, allowing banks to earn more from lending; rate cuts, by contrast, compress profit margins.
• Life Insurance: Rising rates help improve long-term investment returns, but in the short term they can lead to declines in bond prices on insurers’ balance sheets, causing valuation losses.

Because life insurers have a significant weight in the Financial Index, if rate hikes coincide with sharp declines in U.S. Treasury prices or strong appreciation of the New Taiwan dollar, the Financial Index may fall rather than rise—dragging financial futures lower as well.

2. Exchange Rate Movements (TWD/USD)

Most large Taiwanese financial holding companies own sizable life insurance subsidiaries that hold substantial overseas assets, primarily U.S. Treasuries.
When the New Taiwan dollar depreciates and the U.S. dollar strengthens, life insurers typically record significant foreign exchange gains, boosting profits. Conversely, when the TWD appreciates, insurers face FX losses and must pay high hedging costs, which often weigh on the Financial Index and pressure financial futures prices.

3. Equity and Bond Market Performance

The Financial Index is highly correlated with the Taiwanese equity market and U.S. equities. In buoyant stock markets, securities firms earn higher brokerage commissions, and financial holding companies benefit from valuation gains on their equity investments.
However, sharp interest rate moves that trigger steep bond price declines can erode the net worth of financial groups, negatively impacting share prices and, in turn, financial futures performance.

4. Industry Fundamentals and Earnings Data

Taiwanese financial holding companies release monthly earnings reports, which investors closely monitor to assess index trends. Strong profitability among heavily weighted constituents usually drives financial futures prices higher.
In addition, banking metrics such as the non-performing loan (NPL) ratio and the loan loss reserve coverage ratio reflect credit risk. If economic conditions deteriorate and bad debts rise, the Financial Index tends to come under pressure, dragging financial futures lower.

5. Regulatory and Policy Environment

Financial stocks are popular among dividend-focused investors. If regulators impose dividend restrictions or financial holding companies decide to cut cash dividends, share prices often face disappointment-driven selling, putting pressure on financial futures.
Changes in regulations and policies can significantly affect the Financial Index. For example, Taiwan’s insurance industry is expected to adopt IFRS 17 and TW-ICS in 2026, which will have major implications for insurers’ capital requirements and profit recognition. These regulatory transitions are key long-term variables closely watched by the market.

Finance Sector Index Futures Margin

How much money is needed to trade futures? At the beginning, the required margin is the initial margin. While holding a position, the margin after deducting floating profits and losses must remain above the maintenance margin; otherwise, a margin call will be issued. For day-trading margin, only half of the margin is required, provided the position is closed before the market closes.

Domestic Futures

Finance Sector Index Futures Contract Specifications

Here is a summary for traders of the contract specifications, exchange, trading hours, minimum price fluctuation, and available trading months for Finance Sector Index FuturesFutures.

Finance Sector Index FuturesLast Trading Day

Futures