The options on soybean meal futures will be listed and traded on Dalian Commodity Exchange (DCE) on March 31. A DCE official briefed on related issues.
The settlement means for the options positions include close-out, exercise, fulfillment and giving-up.
In terms of the exercise mode of the options on futures, DCE will adopt the mainstream exercise approach of American Options in the foreign mature options market, as the buyers of the options can apply for exercise on the expiration day of the options contracts or any trading day before the expiration.
In-the-money options can be automatically exercised when they get to the expiration date, and the application for exercise of the positions of the options in-the-money with the volume more than zero will be automatically submitted. The buying clients can also give up the automatic exercise of the positions on the basis of the judgments for the future trends of the futures prices and their own fund conditions, and cancel the automatic exercise of the options in-the-money on the trading terminals provided by the member units in the trading hours on the expiration day.
The clients can offset and close-out the options positions on two sides and the futures positions on two sides after exercise via the member service system of the member units, which will contribute to reducing the cost of funds for the clients. The clients holding the options positions on both sides at the same time can choose to offset and close-out the positions.
The clients who open the corresponding futures positions after exercise and hold the futures positions on the opposite side can choose to offset and close out the two-side futures positions after exercise.