To facilitate the related business, it is decided upon discussion to make the following adjustments to the exercise and hedging liquidation from the trading on June 24, 2025 (the night trading session on June 23, 2025）:
1. Abandonment of exercise
DCE now supports the function of abandonment of exercise (i.e. options buyer is able to directly express the intention to abandon the specified numbers of options when the options expire) and cancel the function of cancel the automatic application for exercise. When no exercise or abandonment request has been submitted within the specified time limit, after the market close of the expiration date, the Exchange shall handle the options positions as follows:
(1) the positions of the call options of which the exercise price is less than the then-current day settlement price of the underlying futures contract shall apply for exercise automatically;
(2) the positions of the put options of which the exercise price is greater than the then-current day settlement price of the underlying futures contract shall apply for exercise automatically; and
(3) the other options positions shall be regarded as abandoned.
The options buyer may apply to exercise or abandon the options through two ways: member service system and API. If the accumulated quantitiy of options contracts to be exercised and options contracts to be abandoned exceed the quantity of options the option buyer holds, the Exchange shall process as follows. The Exchange will process application from API firstly, and then process application from member service system. In each way (member service system and API), the later applications shall be processed firstly.
2. Optimization of hedging liquidation functions submitted via APIs
(1) Hedging liquidation of the two-way futures positions following the exercise
1．Change in Application Functionality: The application for hedging liquidation of the two-way futures positions following the exercise, which was previously submitted via the exercise application management interface, will now be submitted through a separate hedging application management interface for hedging liquidation of the two-way futures positions following the exercise.
2. Change in Application Granularity: The application for hedging liquidation of the two-way futures positions following the exercise, which was previously valid only for the specified exercise application, will now support settings based on trading code, product under the trading code, and contract under the trading code. This setting will remain valid only on the day of submission until it is canceled.
(2) Hedging liquidation of two-way futures positions following the fulfillment
Change in Application Granularity and Validity Period: The application for hedging liquidation of two-way futures positions following the fulfillment, which previously applied to all fulfillment business under a trading code, will now support settings based on trading code, product under the trading code, and contract under the trading code. This setting will remain valid only on the day of submission until it is canceled.
(3) Hedging liquidation of two-way options positions
Change in Application Granularity: The application for hedging liquidation of two-way options positions, which was previously valid only for contracts under a trading code, will now support settings based on product under the trading code, contract month of product under the trading code, and contract under the trading code. This setting will remain valid only on the day of submission until it is canceled. When setting a contract under a trading code, specified hedging quantities can be set.
(4) Hedging liquidation of two-way futures positions
New Addition for hedging liquidation of two-way futures positions: The application for hedging liquidation of two-way futures positions will now support settings based on trading code, product under the trading code, and contract under the trading code. This setting will remain valid only on the day of submission until it is canceled. When setting a contract under a trading code, specified hedging quantities can be set.
The above hedging liquidation functions submitted via the member service system will still remain valid long-term until canceled, as before.
All members are required to make necessary preparations, complete system upgrades in a timely manner, and confirm with relevant system developers that their systems support the related business functions. Due to adjustments to the relevant APIs, clients of members who have not upgraded their systems will not be able to submit applications for abandonment of exercise for options, and applications for hedging liquidation of the two-way options positions, hedging liquidation of two-way futures positions, hedging liquidation of two-way futures positions following the exercise and hedging liquidation of two-way futures positions following the fulfillment via APIs, starting from the trading on June 24, 2025. In such case, these services should be processed via the member service system. All members are kindly reminded to inform clients of the related operational changes and provide necessary services to ensure the smooth operation of the business.
