MATIF to launch new Rapeseed Option

Matif SA will open trading in options on its rapeseed future on May 28. The decision to launch the new contract reflects the success of the rapeseed futures, with trading up 40% in 1998 following three years of steady growth. In the first quarter of this year, it was double that in the same period of 1998. Market expansion is continuing with nearly 550 contracts traded on average each day and peaks of over 1,700 on some days. In response, and to meet pressing demands from the production sector, Matif SA, in cooperation with the Organisation Nationale Interprofessionnelle des Oléagineux, the professional association of the French oilseed industry, is thus rounding out its offering with an option on the rapeseed future. Highly flexible, the new product provides an effective way to hedge against unfavorable price swings without losing the benefit of favorable changes. It is also an attractive alternative to existing over-the-counter productd, offering greater price and volume transparency as well as eliminating counterparty risk. The Rapeseed option is an American option on the Matif Rapesed futures contract. The Trading unit is one futures contract, the spread between two strike prices EUR2.5. Twenty-one strike prices are open at all times: the strike price closest to the price of the underlying, the 10 strike prices immediately below and the 10 strike prices immediately above. The premium is in EUR per metric tonne, with one decimal place. The tick size is EUR 0.1 per metric tonne. There are six delivery months, from: August, November, February and May. The 15th of the month preceding the delivery month is the last trading day; if this is a non-working day, the trading day prior to this day is the last trading day. The first trading day of the underlying futures contract is the first trading day. There is automatic exercise of in-the-money options on the last trading day. Pre-opening is 10:30 to 10:45 and 14:45 to 15:00. Trading is from 10:45 to 13:00 and 15:00 to 18:30. Trading is on the NSC-VF system. Consideration is now being given to the feasibility and possible timing for the launch of three additional futures on oleaginous products - sunflower seeds, rapeseed meal and rapeseed oil.