(Reuters) - Hong Kong's bourse operator said on Wednesday it plans to launch by the end of the year weekly options for 10 locally listed stocks, including HSBC Holdings and Alibaba Group Holding, in a bid to offer investors additional risk-management tools.

Options are derivatives that offer the right to buy or sell particular securities, and can be used by investors to manage risks or execute trading strategies.

The 10 stocks also include the Hong Kong Exchanges and Clearing Ltd (HKEX), Tencent Holdings, JD.com, Baidu and BYD Co, HKEX said in a statement on its website.

WHY IT'S IMPORTANT

Hong Kong's benchmark Hang Seng Index has gained more than 7% so far this year, showing signs of life after four consecutive years of losses amid concerns about China's economic health and geopolitical tensions.

Authorities have stepped up efforts to lure back foreign investors and drum up confidence in the Asian financial hub.

Weekly stock options can better meet investors' trading needs, HKEX said. Such contracts can be used by investors to manage positions in response to short-term or specific events such as corporate results.

KEY QUOTE

"The new additions will add to the attractiveness and diversity of our derivatives market, further supporting investors' risk management needs," Brian Roberts, HKEX head of equities product development, said in the statement.

CONTEXT

The planned instruments would be the city's first weekly options based on single stocks.

Hong Kong in 2019 introduced weekly options based on the Hang Seng Index and the Hang Seng China Enterprises Index, and such instruments have since become one of the fastest-growing product types.

HKEX's derivatives market set a record by average daily volume in 2023 and the momentum has continued into 2024, according to the bourse.

(Reporting by Shanghai and Hong Kong newsrooms; editing by Jonathan Oatis)