MGEX (the Exchange) will change the official closing period for the Hard Red Spring Wheat (HRSW) futures contract and modify the settlement price process for futures contracts beginning Monday, July 14, 2008. The change to the settlement process comes following approval by the MGEX Board of Directors.
The official closing period for the HRSW will be changed to match the options contracts from the last thirty (30) seconds of trading to the last sixty (60) seconds of trading. The change to the settlement price process will be more inclusive by taking into consideration bids, offers and trades from the final trading minute from both platforms.
In addition, MGEX settlement prices for futures contracts which have both open outcry and MGEXpress® sessions will be determined by the combined weighted average of the trades and applicable bids and offers made in the closing period. Therefore, MGEX moves towards a combined volume weighted average settlement which includes the applicable prices from the “pit” and electronic market in order to formulate a combined settlement price for all contracts. The settlement price shall be the price consistent with the minimum fluctuations of the contract. “We have seen significant volume growth on the MGEXpress® trading platform. The inclusion of trades, bids and offers from the electronic session will result in a more transparent and pure method of determining the settlement price for the HRSW futures contract,” said James D. Facente, MGEX Director of Market Operations, Clearing & IT.
“Our focus is to provide opportunities and functionality that will benefit market participants by ensuring market transparency and using prices from both trading venues leads us to a more representative and accurate settlement process,” said Mark G. Bagan, President & CEO of the Exchange.
