The options contract will be available for trading for consecutive months beginning with the May 2004 contract through the December 2006 contract.
Strike prices will be listed in increments of $0.50 per megawatt hour, with 20 strike prices below and 20 prices above the at-the-money strike price (the one closest to the previous day's futures settlement price), and in wider increments of $1 per megawatt hour with 10 strikes above the highest and 10 below the lowest $0.50 interval for a total of at least 61 strike prices. As the at-the-money strike price moves, additional strike prices will be added. There will be no limit on price fluctuations. The options contracts will expire on the second to last business day prior to the underlying futures month.
Trading hours will be the same as the open outcry trading hours for the underlying futures contract, 7:30 AM to 2:30 PM.
Unlike futures, the buyer of an options contract obtains the right but not the obligation to buy or sell electricity at an agreed upon price. The seller, or writer of an options contract has the obligation to provide a long or short futures contract at that price, if the option is exercised.
