The program, which was first introduced July 26, allows participants to exchange over-the-counter (OTC) options positions for options positions on the Exchange. It expired on November 27 and may only be further extended by the Exchange board.
EOO transactions are similar to exchange of futures for physical and exchange of futures for swaps transactions. Two parties are allowed to privately negotiate the execution of on- and off-exchange options positions on pricing terms agreed upon by the involved parties. The transactions must involve approximately equal but opposite side-of-market quantities of options exposures in the same or related commodities.
These transactions will be permitted to liquidate, initiate, and transfer options market positions between the two parties involved in the transaction. The clearing member representing each party will be responsible to notify the Exchange of the amount and type of options contracts involved, the price at which the transaction should be cleared, and the identity of the parties involved.
