The contracts will be financially settled based on the difference between the strike price and the average of front month settlements during the calendar month. For call options, the strike price will be subtracted from the average front month price over the course of the calendar month. For put options, the final settlement will be the strike price minus the average front month price over the calendar month.
These options cannot be exercised prior to expiration and are cash settled at that time, rather than being exercised into the futures contract.
The underlying futures contracts will be the West Texas Intermediate, New York harbor heating oil, and New York harbor gasoline calendar swap futures contracts, all of which expire on the last business day of the contract month.
The symbol for average price crude oil options will be AO; for heating oil, AT; and, for gasoline, AU.
All other specifications, including trading hours, will mirror the established options contract for the related commodity.
Exchange President J. Robert Collins, Jr., said, "Average price options have become a popular off-exchange product based on our markets. By placing them in an open outcry forum, we are further extending the liquidity, transparency, and security of our marketplace to the sophisticated users of these instruments."
