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On December 15, DCE issued an announcement to solicit public opinions on ethylene glycol futures options and styrene futures options (hereinafter referred to as "ethylene glycol options" and "styrene options") contracts, and the deadline for feedback was December 21
.
According to reports, ethylene glycol and styrene are important liquid chemicals
.
In recent years, affected by many factors such as the epidemic, the impact of overseas markets, and the expansion of domestic production capacity, the spot prices of ethylene glycol and styrene have fluctuated frequently
.
Since 2018, ethylene glycol and styrene futures have been listed successively, and the functions of risk management and price discovery have been effectively played
.
In the first 11 months of 2022, the trading volume of ethylene glycol and styrene futures was 110 million lots and 70 million lots, respectively, the average daily positions were 516,000 lots and 228,000 lots, the hedging efficiency and spot price correlation remained above 90%, and the positions of legal person customers participating in ethylene glycol and styrene futures trading accounted for 79% and 77%, respectively, an increase of 7 and 6 percentage points
over the same period last year.
While actively participating in the futures market, relevant industrial enterprises call for the listing of option contracts as soon as possible to provide more accurate and powerful hedging tools and strategies
.
As the first exchange in China to launch commodity options, the options market of Dashang has maintained healthy and rapid development over the years, and the variety of commodity options has become increasingly abundant
.
Starting from the listing of the first domestic commodity option - soybean meal option in 2017, Dashang has launched 11 commodity options, covering agricultural products, black, chemical and other fields
.
Among them, in the chemical sector, Dashang has listed 4 chemical options
of linear low-density polyethylene, polyvinyl chloride, polypropylene and liquefied petroleum gas.
In the first 11 months of 2022, the trading volume and average daily position of commodity options accounted for 47% and 60%
of the domestic commodity options market.
According to this announcement, ethylene glycol and styrene option contracts are the same as those listed on Dashang, both are American options, applicable to the same set of rule system, and the strike price spacing and minimum change price are designed in a targeted manner
.
Specifically, the two option varieties follow the segmented exercise price spacing design idea
.
When the exercise price of ethylene glycol options is between 2500 and 5000 yuan/ton, the exercise price interval is 50 yuan/ton, and the range below and above is 25 yuan/ton and 100 yuan/ton respectively; When the exercise price of styrene options is between 5,000 and 10,000 yuan/ton, the exercise price interval is 100 yuan/ton, and the range below and above is 50 yuan/ton and 200 yuan/ton
respectively.
The exercise price covers the range corresponding to the 1.
5 times the price limit of the underlying futures contract, which is convenient to meet traders' hedging needs
for flat, real and imaginary options.
The minimum change price is 0.
5 yuan / ton, which is 1/2 of the minimum change price of the underlying futures, which is conducive to the timely and effective reflection of the underlying price change of the option price
.
The option expiration date and last trading day are the 5th trading day of the month preceding the delivery month of the underlying futures contract, which coincides with
the listed option variety.
The relevant person in charge of the firm said that in the process of developing the option contract, the firm conducted in-depth discussions with industry experts, industrial enterprises, futures companies, etc.
, and finally formed this draft for comments, and welcomed valuable opinions and suggestions
from all parties in the market.