It was the first expiry day for the options on soybean meal futures (the “soybean meal options” for short) on Dalian Commodity Exchange (DCE) on June 7 since the listing and trading, and on the day, the 32 contracts in the soybean meal options M1707 series were successfully delisted, smoothly completing the whole operation process.
Since the listing and trading, the M1707 options have totaled a trading volume of 94,000 contracts (single-sided, the same below) and a turnover of RMB56.79 million, accounting for 11.79% and 9.10% of the totals for the soybean meal options. With the expiry day approaching, all the out-of-the-money options returned to the lowest price, which was equal to the tick size RMB 0.5 / tonne, and the prices of the in-the-money options were close to the intrinsic value. On the expiry day, the options of M1707 series recorded a trading volume of 861 contracts, and the underlying M1707 futures opened at RMB 2,618 / tonne, with the settlement at RMB 2,628 / tonne, and closed at RMB 2,631 / tonne, up by 0.1%, which is slightly lower than the fluctuation of the dominant M1709 Contract. Overall, the investors were rational in trading and the market posted stable fluctuations.
Although the soybean meal options are American options which means the buyer can exercise on the expiry day or any trading day before the expiry day, the exercise mainly fell on the expiry day, and accounted for 78.06% of the total exercise of M1707 options. The data show that on June 7, a total of 2,231 M1707 options were actually exercised, including 448 call options and 1,783 put options. All the exercised were in-the-money options, and no out-of-the-money options were applied for exercise. In terms of the number of the clients, at the closing on the day, 38 clients carried out the exercise, and 49 clients participated in the fulfillment.
