On May 6, Shanghai International Energy Exchange (INE), a Shanghai Futures Exchange (SHFE) subsidiary, released a circular on seeking public comments on its upcoming crude oil options contract and related rules. The crude oil options contract will be the first options product listed on INE and complements the product mix of crude oil futures (“SC”).
Public comments are being sought for the INE Crude Oil Options Contract Specifications and the Options Trading Rules of the Shanghai International Energy Exchange, as well as for other related implementing rules which have been revised accordingly.
The proposed crude oil options contract specifies that:
To prepare for the launch of this product, on the basis of its current rules framework, INE has newly released the INE Crude Oil Options Contract Specifications and the Options Trading Rules of the Shanghai International Energy Exchange, and updated five related rules (i.e., Trading Rules, Clearing Rules, Risk Management Rules, Information Management Rules, and Futures Trading Participant Eligibility Management Rules) in order to support such activities as options trading, settlement, and exercise and performance.
An INE official commented that the launch of crude oil options will help enrich the product line in China’s crude oil market and thus provide the oil industry with a more complete set of risk management tools and make oil companies more competitive and meet the needs of related enterprises for elaborate risk management.