- Building on the success of the KTB Futures, KOFEX successfully launched the Korea Treasury Bond (KTB) futures options on May 10, 2002.
- The underlying asset of the new options product is the 3-Year KTB futures contract (Options on futures), and it is exercisable at any time before the expiration (American style).
KTB Futures Options Successfully Launched on May 10, 2002
Building on the success of the KTB Futures, KOFEX successfully launched the Korea Treasury Bond (KTB) futures options on May 10, 2002. The underlying asset of the new options product is the 3-Year KTB futures contract (Options on futures), and it is exercisable at any time before the expiration (American style).
The exchange commission of the KTB futures options has been set to 0.03% of the premium amount, i.e., the exchange commission equals 0.03% Í premium. However, the Exchange proclaimed the exchange fee holidays for the KTB futures options until September 30, 2002.
Additionally, the Exchange lowered the exchange commission for the USD options from 0.5% to 0.03%, beginning from May 10, 2002 as well.
The KTB futures options market, following the case of its underlying assets, is expected to allure diverse group of investors including banking institutions, investment trust companies, securities brokerage houses and individual investors.
Here is the product specification for the KTB futures options as follows:
The Specifications of the KTB Futures Options
- Underlying Asset: The Korea Treasury bond Futures (Options on Futures) - The underlying asset for the KTB futures is a 3-yr Korea Treasury bond with an 8% coupon
- Trading Unit: One KTB Futures contract
- Exercise Style: American (Exercisable at any time before expiration)
- Premium Quotation: To two decimal places
- Tick Size & Tick Value: Tick size: 0.01, Tick Value: KRW 10,000
- Strike Price: Strike prices are set with an interval of 0.50, Total 9 strike prices are initially listed: one at the money, four in the money, and four out of the money, (Additionally listed as the price of the underlying asset changes)
- Number of Contract listed: 4 contract months, Contract Month, Consecutive 3 months and one of additional month from March quarterly cycle
- Daily Price Limit: None
- Position Limit: It can be adopted if necessary
- Trading Hours: 09:00 ~15:00 (No lunch break, Mon. - Fri.), Including the last trading day
- Last Trading Day: One business day before the first Wednesday of each contract month (If the calculated last trading day happens to be in the previous month - In case the first Wednesday is the first day of the contract month), the last trading day shall be the first trading day of the contract month.)
- Expiration Date of Options: Last Trading day of the contract month
- Exercise: The time limit for exercise request: 90 minutes after closing the market (16:30)
- Exercise Limit: None
- Exercise: OTM Options: Possible; ITM Options: Automatically exercised on the last trading day
