To draw on foreign experience, facilitate the cultivation of domestic practical talents, and steadily promote the preparatory work for soybean meal and other commodity options of Dalian Commodity Exchange (DCE), DCE lately held the advanced option practice training in Dalian and Sheldon Natenberg, an expert in option fluctuation ratio and option pricing from the United States, conducted a one-week training for over 100 trainees from spot enterprises, futures companies, securities, and investment institutions in China.
The training mainly centered on five aspects of market concern, including the option pricing mode, the fluctuation ratio analysis and relevant strategies, the market-making system and relevant trading strategies, the classic option trading cases, and the option trading behavior management, and it emphasized the application of the fluctuation ratio theory and relevant option pricing modes in practical trading. “The current training, as part of DCE’s market investor education, is of great significance.” said trainee Jiang Dazhong from the option department of an investment institution. At present, there is a great need for option training and for talents, especially industry insiders with practical experiences, in China. Therefore, professional training on option practice is of urgent need before the listing of options in China’s market. As the current training was very professional and of great pertinence, also close to practical trading, and presented abundant information in simple language, it has achieved good results and been well received.
“Domestic exchanges should set up specialized institutions to take charge of market training and tell market participants what option is, how to participate in option market, and how to realize their risks.” said Sheldon Natenberg in the interview.
“Compared with domestic investment companies, futures companies, and other participants, the reserve of option talents still faces many shortages. Though some companies have already participated in the outer option market, professional talents are still not enough. Therefore, it is hoped that more such market training activities will be held.” said Jiang Dazhong.
Relevant person from DCE introduced that preparation in market publicity and investor education is one of the focuses of DCE’s option preparation work. Since the beginning of this year, DCE has completed the formulation of the manual on basic option and soybean meal option industry application strategies which has been put on the market and it has also promoted the orderly proceed of option training and other market training work. Up till now, DCE has conducted 27 option training activities successively with securities and futures associations of different regions, with the number of trainees exceeding 5,000, thus laying a good foundation for the popularization of the basic option knowledge and the application strategies. On that basis, DCE has, by combining the characteristics of its own products, conducted training for senior personnel on agricultural option trading and invited famous foreign experts to impart option operation strategies and share their practical trading experiences. All previous training activities have achieved obvious results and the participated investors have expanded from exchanges’ staff and some members to all members since DCE launched the option emulation trading. Currently, the average daily trading volume is between 500,000 and 1 million contracts and 20 corporate clients have participated in DCE’s emulation trading as market markers.
While the option training activities have been actively promoted, DCE has accelerated its preparation work for the listing of series options. In August this year, DCE has completed the preparation for relevant business rules of option and formulated the option trading management method, the market makers management method, and the investor propriety management method, thus finishing the basic preparation in the institutional level.
In terms of the technical system which is important for option trading, relevant person from DCE said that DCE’s own option trading system has been set up and meanwhile it has actively supported and promoted the system construction in its members’ side. At present, corresponding improvement and upgrading have been conducted for the mainstream systems on members’ side in the market, which have been put into use in the emulation system for testing and presented good results.