On December 20, 2024, Dalian Commodity Exchange (DCE) announced amendments to the Measures for Management of Options Trading, as well as adjustments to the soybean meal and corn options contracts. DCE plans to introduce series of options contracts at the appropriate time for these two products on a trial basis.
The changes made it clear that soybean meal and corn series of options contracts will commence trading on the first trading day of the fifth month preceding the delivery month of the underlying futures contracts. The last trading day for these options contracts will be the twelfth trading day of the second month preceding the delivery month of the underlying futures contracts. Additionally, the contract trading symbol will include "MS" as an identifier for the series of options. Apart from these changes, series options will adhere to the same rule system as that of regular options. The listing and trading time of the series of options contracts and related matters will be announced separately by DCE.
Series of options are newly added contracts based on existing regular options contracts, sharing the same underlying futures contracts. Currently, there are eight and six expiration months for soybean meal and corn options, respectively. With the introduction of series of options contracts, both products will expand to cover 12 expiration months. As a supplement to regular options, series of options feature later listing dates, earlier expiration dates, and shorter durations. According to the contract rules, the duration of series of options contracts for soybean meal and corn is approximately 3.5 months, compared with nearly one year for regular options contracts. In overseas markets, series of options are already commonly used in agricultural options which don’t cover all 12 months.
The to-be-launched series of options contracts further improves the duration structure of the options market. It allows enterprises to select options contracts that better align with their spot trading windows for hedging purposes, catering to the continuous and stable risk management needs of the industry, while reducing capital costs for participating in options hedging activities.
