The contract is scheduled to launch on Friday, February 24, 2006 under the ticker symbol of BC for calls and BP for puts. The contract size will be 50,000 bushels. Redman and Rich, a Chicago-based independent trading firm, is the first firm to agree to serve as a market maker during the CBOT’s daytime open auction trading session for the new contract. Market makers are contractually obligated to provide competitive two-sided markets at a minimum depth for both call and put options.
CBOT Senior Vice President of Business Development Robert D. Ray said, “We believe adding a crush spread options contract has the potential to further strengthen the liquidity of our entire Soybean Complex by allowing market participants to efficiently establish a crush spread position with a single contract. Plus, buyers of crush spread options are not subject to margin requirements that are necessary when trading an outright futures spread. We are pleased to have Redman and Rich committed to building a new, competitive market for this contract.”
Market users can access the CBOT’s web site at www.cbot.com to view quotes on the underlying synthetic soybean futures crush spread as well as the new soybean crush spread options contract once the contract launches. The CBOT’s Soybean Complex consists of CBOT Soybean futures and options contracts, CBOT mini-sized Soybean futures contracts, CBOT Soybean Meal futures and options contracts, CBOT Soybean Oil futures and options contracts, and CBOT South American Soybean futures contract. Last month the CBOT’s Soybean Complex reported an average daily volume of 166,163 contracts traded versus 154,366 contracts traded in January 2005, an increase of eight percent.
