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Dalian Commodity Exchange (DCE) celebrated the one-year anniversary of listing soybean suite options on August 8, 2023. The soybean suite includes No. 1 soybean, No. 2 soybean , and soybean oil options. Over the past year, the three options have maintained stable operation, and their trading volume has been steadily increasing. The functions of options begun to performance.
As of the closing on August 7, these options have been traded for 243 trading days, accumulating an impressive total trading volume of 33.63 million lots with a total turnover of 14.3 billion yuan. The average daily trading volume and average daily open interest stood at 138,400 lots and 154,800 lots, respectively. The number of industrial clients participating in the trading is on the rise.
In terms of volatility, when spot and futures markets were relatively stable over the past year, the volatility of No. 1 soybean options was kept between 15% and 20%, while that of No. 2 soybean options and soybean oil options ranged from 20% to 25%. When spot and futures prices experienced significant fluctuations, the implied volatility of these options has responded rapidly, surging to nearly 40%. Changes in implied volatility effectively reflect the market expectations regarding price fluctuations of the corresponding commodity futures, thus ensuring the effective implementation of the risk-hedging function of these options.
Notably, a total of 14 market makers have been actively engaged in market-making activities for the three options, providing market liquidity through continuous quotation and responsive quotation. This has facilitated the rational formation of options prices and the steady expansion of trading scales.
The three options have further diversified the risk management toolkit for the soybean industry, enhancing the companies’ resilience to risks and their competitiveness in the market.
Moving forward, DCE will continue to monitor market dynamics, improve the operational quality and functionality of the soybean futures and options, and enhance the overall market supply quality. Meanwhile, efforts will be made to enhance the awareness and participation of industrial clients in the soybean options, and to meet the diverse risk management needs of the soybean industry.
