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The first option to be listed for overseas traders!

Fang submitted 2021-06-21 13:46:49

The first option to be listed for overseas traders! 360 contracts were launched on the first day, and traders did not see any obvious operations of chasing ups and downs

Chen Shaowang, Deputy Secretary of the Dalian Municipal Party Committee and Mayor, and Ran Hua, Secretary of the Party Committee and Chairman of the DCE, jointly opened the market for palm olein options

China's commodity futures market aims to increase the price influence of important commodities and further open up to the outside world. On June 18, palm olein options, the first option open to overseas traders, were successfully listed.

Palm Olein Option is China's first option contract to introduce overseas traders, and it is also the first option to be launched simultaneously with the introduction of overseas traders. From the introduction of foreign traders to participate in palm olein futures in December last year, to the opening of palm olein options, palm olein has taken the lead in realizing futures options, on- and off-exchange, domestic and international coverage on all imported commodities.

Palm olein is the vegetable olein variety with the largest output and the largest international trade volume in the world. At present, China has become the world's second largest importer of palm olein. To enhance the influence of commodity prices, it is of course urgent to accelerate the pace of opening up the futures market. At present, the domestic futures market accounts for less than 10% of the products opened to the outside world, and the proportion of foreign investors participating in China's futures market transactions is not high.

On the first day of listing, palm olein options launched a total of 360 contracts in 10 series. Statistics show that the trading volume of palm olein options on that day was 37,000 lots (one-sided, the same below), with a turnover of 100 million yuan and holdings of 20,000 lots. Among them, the turnover ratio of call options and put options is 1.35, and the holding ratio is 1.20. The series with the largest palm olein options trading and open interest on that day was P2109, and the ratio of trading volume and open interest to palm olein options was 76.8% and 71.7%, respectively.

China’s first international option product is listed, and palm olein varieties are the first to achieve full coverage

On June 18, palm olein options were listed on the DCE. As the world’s largest palm olein futures market, China will join hands with palm olein futures after the listing of palm olein options and the introduction of overseas traders to further improve the level of risk management of palm olein industry chain companies, stabilize corporate profitability, and jointly serve national strategies.

Gao Wen, secretary-general of the China Vegetable Olein Industry Association, said that palm olein is the most widely used vegetable olein in the food industry, and its consumption has surpassed soybean olein to become the world's largest consumption of vegetable olein. At present, China has become the world's second largest importer of palm olein, and the volatility of palm olein spot prices continues to intensify. Spot companies are eagerly looking forward to an early listing and the simultaneous opening of palm olein options and other risk management tools to escort them in the international palm olein trade.

Palm olein options, as China’s first olein options varieties introduced to overseas traders, are an important achievement of industrial risk management needs and the development of China’s futures market; it is also an important measure for the futures market to take root in the industry and serve the entity; it is also the opening of China and the global economy. An important manifestation of win-win cooperation.

Ran Hua, Secretary of the Party Committee and Chairman of the Board of Directors of Dalian Commodity Exchange, said that the deep cultivation and expansion history of the palm olein derivatives system is a step forward for DCE to firmly promote the international first-class derivatives exchange is a miniature based on the futures spot, focusing on the inside and outside of the market, focusing on the domestic and overseas markets.

From the listing of palm olein futures in 2007, to the current 70% of domestic palm olein spot trades that use DCE futures prices as the pricing benchmark, leading domestic and foreign grain and olein companies have extensively used the futures market for risk management; from 2017, pilot palm olein over-the-counter options , The palm olein commodity swap was launched in 2018, to the introduction of palm olein basis trading on over-the-counter platforms this year, and then to the official listing of palm olein on-site options; from the introduction of foreign traders to participate in palm olein futures in December last year, to the opening to the outside world of palm olein options, DCE took the lead in realizing the coverage of futures options, both on- and off-exchange, both domestic and international on palm olein.

Step by step, DCE has initially formed a derivative instrument system combining futures and spot, on- and off-exchange collaboration, and domestic and overseas connectivity on palm olein, which can better serve the palm olein industry’s integration into the domestic big cycle.

37,000 lots were traded on the first day of listing, and the implied volatility of each option contract was within a reasonable range

On the same day, affected by the sharp drop in the CBOT market, domestic oleins and fats fell further, and palm olein futures prices had fallen to a two-month low. Palm olein options launched a total of 10 series of 360 contracts on the first day of listing. Statistics show that palm olein options had a trading volume of 37,000 lots (one-sided, the same below) on that day, with a turnover of 100 million yuan and open interest of 20,000 lots. Among them, the turnover ratio of call options and put options is 1.35, and the holding ratio is 1.20. The series with the largest palm olein options trading and open interest on that day was P2109, and the ratio of trading volume and open interest to palm olein options was 76.8% and 71.7%, respectively.

Judging from the operation of palm olein options on the day, the open price of the call-at-value option contract P2109-C-6700 was 340.5 yuan/ton and the closing price was RMB 355.5/ton, an increase of 4.4% throughout the day; the opening price of the put-at-the-money option contract P2109-P-6700 was 300 yuan/ton and the closing price was 355 yuan/ton, an increase of 18.3% throughout the day.

Feng Shidian, a researcher of Founder's mid-term options, said that palm olein options performed very well on the day. In all-day trading, the implied volatility of each option contract was within a reasonable range. Among them, the implied volatility of the 2109 series of at-the-money options with the largest trading volume is basically at the level of 35% to 40%, which is slightly higher than the historical volatility, and remains basically stable throughout the day. The price sequence of each option series fully meets the monotonicity. In relation to other prices, option contracts are reasonably priced, the volatility surface is relatively smooth, and there is no obvious arbitrage opportunity. In addition, the palm olein options trading volume PCR (put call ratio) on the day was 0.7, and the open interest PCR was 0.8, indicating that although the palm olein futures prices fell on that day, investors did not concentrate on put options trading, indicating that investors did not appear to chase ups and downs significantly.

It is worth noting that palm olein options and DCE listed options apply to the same set of rules, and the contract design ideas are basically the same. Combined with the actual operation of the palm olein futures market, the exchange has made targeted designs in terms of exercise price interval and minimum price change. Different from other option contracts, palm olein options will be introduced to overseas traders after they are listed. With reference to the relevant regulations on specific products, the management of overseas participants will be managed in accordance with the real-name system and transaction code.

At the same time, foreign traders participating in palm olein futures trading should meet the relevant requirements for the suitability of specific varieties of traders. In terms of transactions, overseas traders can participate through domestic futures companies or overseas brokerage agencies entrusting domestic futures companies to participate; the settlement system is still priced in RMB, and U.S. dollars can be used as margin.

Attract foreign companies to actively participate, and a three-dimensional risk control system ensures the smooth operation of the market

At present, palm olein is the world's largest vegetable olein variety with the largest international trade volume. It is also a special variety with the domestic demand side and the supply side relying entirely on imports. According to the latest data released by the General Administration of Customs, China imported 420,000 tons of palm edible olein in May, a year-on-year increase of 49.2%.

The listing of palm olein options has attracted the attention of many overseas industrial companies. For example, China Merchants Foreign Trade (Singapore) Co., Ltd. entrusted Xinhu Futures to participate in the palm olein options transaction through Times Financial Services Co., Ltd. on the same day.

It is reported that China Merchants Foreign Trade (Singapore) Co., Ltd. specializes in the import and export business of bulk trade of agricultural products with Southeast Asia and the European Union as the origin. The focus is on palm olein, sunflower olein, non-genetically modified soybean olein, genetically modified vegetable olein and refined sugar. Commodity transactions mainly face China's export trade. The company once participated in the trading of palm olein futures on the day when foreign traders were introduced. Managing Director Zhang Yang said that the listing of palm olein options can form a synergy with futures, provide companies with more means and strategies for risk management, stabilize daily production and operations, and also help promote the development of the rights-containing trading model in the olein industry.

"After the introduction of foreign traders, can the palm olein options market achieve safe and stable operation?" The relevant person in charge of DCE told the Securities Times reporter that DCE used the risk prevention and control system of other mature futures, as well as options contracts and designed the main Including price limit, position limit, large account report, forced liquidation system, etc., so that the palm olein option risk control framework and overall market supervision regulations are the same as other existing option contracts, and domestic and overseas traders need to comply with the same risk management and market supervision system, In order to effectively prevent and control market risks.

In addition, after the listing of palm olein options, DCE will, on the one hand, adopt systematic risk control measures to ensure the smooth operation of the market; on the other hand, it will strengthen market monitoring, conduct pre-study and pre-judgment of market risks, and earnestly perform transactions, supervision and service responsibilities in important links such as settlement, delivery, and supervision, and effectively play the role of "five bodies in one" coordinated supervision to effectively prevent, control and resolve market risks. At the same time, we will do a good job in investor education and market cultivation, guide various entities to participate rationally, ensure the safe and stable operation of the market, and promote market functions.

At present, the futures market has established a multi-line and three-dimensional risk control system, which can effectively resolve various potential risks in a timely manner, and the market risk prevention and control capabilities have been upgraded to a new level. Therefore, after the listing of palm olein options and the introduction of overseas traders, all the confidence in the transaction will also be able to prevent and control market risks, and ensure the safe and stable operation and function of the market.

上市首日成交3.7万手, 各期权合约的隐含波动率均处于合理范围

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