The existing January 2003 Sugar No. 11 regular option contract (the "Jan/Jan contract"), which has the January 2003 Sugar No. 11 future contracts as its underlying future, will continue to trade under its regular commodity code of "SB". Both of the January 2003 contracts will cease trading on Friday, December 13, 2002.
Because the new Jan/March serial contract will be trading under a different commodity code, for margin purposes it will be treated differently than the existing Sugar No. 11 options contracts. This means that the margining of a new Jan/March position will be different from the margining of an identical position in the existing Jan/Jan contract. While in some cases the margin for the Jan/March contract may be lower than for the Jan/Jan contract, in many cases it will be higher and in some cases it may be significantly higher. Traders of the new Jan/March contract should be aware of the different margin treatment for this contract.
Members who execute trades in the new Jan/March contract will need to identify the contract month on their trading card, and will need to ensure that all such trades are entered into the TIPS system using the SN commodity code. Trade prices for the Jan/March contract will be displayed in the SPQR System under the SN code. Daily trading activity, volume and open interest will be reported on separate Daily Market, Daily Volume and Daily Open Interest Reports.
The text of the amendment to Sugar Options Rule 10.02 follows below. If you would like a copy that shows language additions or deletions, please contact the Corporate Secretary's office at +1 212 625-6624.
Rule 10.02. Trading Months
1. Except as the Board may from time to time prescribe otherwise, sugar options shall be traded with respect to option determined in accordance with the following:
(b) Trading shall also be conducted in an option traded on the March futures which shall expire in January, the option traded on the May futures which shall expire in March, an option traded on the July futures which shall expire in May, an option traded on the October futures which shall expire in July, an option traded on the October futures which shall expire in August, an option traded on the March futures which shall expire in October, an option traded on the March futures which shall expire in November, and an option traded on the March futures which shall expire in December hereinafter referred to as the "serial option months."
[REMAINDER OF RULE UNCHANGED]
CONTRACT SPECIFICATIONS FOR JAN/MARCH SUGAR NO. 11 SERIAL OPTION CONTRACT
TRADING SYMBOL: SN
TRADING UNIT: One Sugar No. 11 futures contract.
TRADING HOURS: 9:00 a.m. to 12:00 p.m. (EST)
PRICE QUOTATION: Cents per pound
CONTRACT MONTH: January 2003. The underlying futures contract for this option is the March 2003 future.
EXPIRATION DATE: Friday, December 13, 2002. Notification of intention to
exercise must be made by an options holder to the
carrying member firm by 3:00 p.m. on that date.
MINIMUM FLUCTUATION: 1/100 of a cent per pound, equivalent to $11.20 per contract
POSITION LIMITS: See futures specifications.
STRIKE PRICE: ½ half cent at a futures price up to 15 cents/lb.
INCREMENTS: 1 cent at a futures price between 15 and 40 cents/lb.
2 cents above 40 cents/lb.
NOTE: The margin treatment for the Jan/March Serial Option is different than the treatment of existing Sugar Option contracts. This means that the margining of a new Jan/March position will be different from the margining of an identical position in the existing Jan/Jan contract. While in some cases the margin for the Jan/March contract may be lower than for the Jan/Jan contract, in many cases it will be higher and in some cases it may be significantly higher. Traders of the new Jan/March contract should be aware of the different margin treatment for this contract.
