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China Securities Regulatory Commission (CSRC) has officially approved the registration of Ethylene Glycol options and Ethenylbenzene options on Dalian Commodity Exchange (DCE) . The relevant matters are hereby released:
I. Listing and Trading Time
Ethylene Glycol options and Ethenylbenzene options will be listed for trading on Monday, May 15, 2023. On the listing day, the call auction will be from 8:55 to 9:00, and the opening time will be at 9:00. Night trading period will begin on Monday, May 15, 2023. After the first trading day, the trading hours of Ethylene Glycol options and Ethenylbenzene options will be the same as the underlying futures.
II. Contracts Listed for Trading
The contract months of Ethylene Glycol options and Ethenylbenzene options listed on the first day start from July 2023 (namely EG2307 and EB2307 contracts). Ethylene Glycol options listed for trading cover ten contract months, namely EG2307, EG2308, EG2309, EG2310, EG2311, EG2312, EG2401, EG2402, EG2403 and EG2404. Ethenylbenzene options listed for trading cover ten contract months, namely EB2307, EB2308, EB2309, EB2310, EB2311, EB2312, EB2401, EB2402, EB2403 and EB2404.
III. Listing Prices
The listing prices of Ethylene Glycol options and Ethenylbenzene options contracts are calculated based on the BAW American style futures options pricing model. The interest rate in the model is the benchmark one-year deposit rate, and the volatility is the 90-day historical volatility of the underlying futures contract. The listing prices of Ethylene Glycol options and Ethenylbenzene options contracts will be released together with the settlement data through the Member Service System after the settlement on the trading day prior to the listing day, and will also be released on DCE’s website (www.dce.com.cn).
IV. Trading Orders
Limit order and stop limit order will be offered. The maximum quantity of orders placed each time of the options contract is the same as that of the underlying futures contract.
V. Exercise and Fulfillment
During the trading hours of any trading day and from 15:00 to 15:30 on the expiration day, clients may submit application for exercise, hedging liquidation of the two-way options positions, hedging liquidation of the two-way futures positions following exercise or fulfillment. During the trading hours and from 15:00 to 15:30 on the expiration day, clients may submit application for cancelling automatic exercise of options.
VI. Position Limits
The position limit for Ethylene Glycol options contracts is 8,000 lots, and the position limit for Ethenylbenzene options contracts is 12,000 lots. The position limits of Ethylene Glycol options, Ethenylbenzene options and their underlying futures are separate. With respect to the options contracts of a particular month held by the Non-Futures Company Member and the client, neither the sum of the buying open interest of all call options and the selling open interest of all put options, nor the sum of buying open interest of all put options and the selling open interest of all call options may exceed the position limit of the corresponding options contracts. The positions involving actual control relationship shall be calculated on a consolidated basis.
VII. Related Commissions
The trading commissions of Ethylene Glycol options and Ethenylbenzene options contracts are both 0.5 CNY/lot. The exercise (fulfillment) commissions of Ethylene Glycol options and Ethenylbenzene options contracts are both 1 CNY/lot.
VIII. Market Maker Mechanism and Quotation Inquiry
The market maker mechanism is implemented in the trading of Ethylene Glycol options and Ethenylbenzene options. Non-Futures Company Members or clients may submit a quotation inquiry to the market makers on non-continuous-quotation contracts. The continuous-quotation contracts will be released on DCE’s website. The quotation inquiry shall specify the contract symbol of the options. The interval between two quotation inquiries on the same options contract should not be less than 60 seconds. The maximum number of quotation inquiries on each options product under the same trading code is 200 per day.
All entities concerned are required to effectively make preparations for the listing and trading of Ethylene Glycol options and Ethenylbenzene options, and improve risk management measures to ensure the smooth operation of the market.
