TAIFEX Announces System Optimizations to Protect High-Priced Stock Futures and ETF Options

The Taiwan Futures Exchange (TAIFEX) announced two system optimization measures today, including 'adjusting the minimum tick size for stock futures priced over 1,000 TWD' and 'applying a three-stage price limit mechanism to foreign-component ETF futures and options.' These changes are scheduled to take effect on July 6, pending regulatory approval. In response to the growing number of high-priced stocks in the Taiwan market, TAIFEX is refining tick sizes to improve trading efficiency and liquidity. The 1 TWD tick size will now apply to stocks priced between 500 TWD and 2,500 TWD, while stocks above 2,500 TWD will maintain a 5 TWD tick. As of May 22, 22 stocks, including TSMC and Delta Electronics, fall into the 1,000–2,500 TWD range. This will effectively lower trading costs for high-priced stocks. Furthermore, to enhance risk management, the current ±15% price limit for foreign-component ETF derivatives will be optimized into a three-stage mechanism. Foreign equity ETFs will follow ±7%, ±10%, and ±15% limits, while bond ETFs will follow ±5%, ±10%, and ±15%. A 5-minute cooling-off period will be triggered when the first two limits are hit, providing a stronger safety net during extreme market volatility.