Preparations for the listing of agricultural product options are ready
“All preparatory work for agricultural product options at the Zhengzhou Commodity Exchange is ready, and the exchange will strive to launch them at the most appropriate time.” A relevant person in charge of the Zhengzhou Commodity Exchange said at the Agricultural Product Options Development Forum that against the background of the state carrying out target price reform for agricultural products, the market has high expectations for agricultural product options. After pilot options trading is launched, options trading as a tool should better play its function and role in serving the real economy.
A relevant person in charge of the Zhengzhou Commodity Exchange said that the Zhengzhou Commodity Exchange already has the conditions to launch pilot options trading, mainly reflected in four aspects: First, an options rule system has been formed. The results of multiple rounds of simulated and mock trading show that the design of the Zhengzhou Commodity Exchange's options contracts, rules and systems has strong applicability and operability, sufficient to meet the needs of carrying out options pilots. Second, the technical system has already met the requirements for options listing. The options functions of the Zhengzhou Commodity Exchange's exchange-side technical system are relatively complete, and it was officially launched on April 11 this year and has been running smoothly for more than 200 days so far. Third, many investors have received options training and education. In the whole-market mock trading training started by the Zhengzhou Commodity Exchange last year, more than 14,000 investors from more than 140 members signed up to participate. Fourth, the market maker business has met the basic requirements for providing liquidity for options listing. In the market maker mock trading competition that began in late November, 64 institutions had passed preliminary screening to participate in this market maker competition.
In addition, the above-mentioned person in charge believes that some new changes in the Zhengzhou futures market since the beginning of this year have also created conditions for carrying out pilot options trading in white sugar and cotton. First, the open interest, trading volume and turnover of products at the Zhengzhou Commodity Exchange all reached their highest levels in history. Second, the structure of active products has improved greatly. In the first 11 months of this year, among the 10 most active products in the whole market, the Zhengzhou market accounted for 4. The active products of the Zhengzhou Commodity Exchange have gradually developed from 4 in the past into “5+3”, namely 5 active and 3 relatively active. Third, a situation in which near-month contracts are active has initially taken shape. For near-month contracts of many products such as methanol, thermal coal, PTA, methanol and cotton, the period of active trading was delayed by 15—41 days. Finally, the trading volume and open interest of corporate clients both increased considerably compared with the same period last year, and the investor structure further improved.
“The premise for agricultural product options to play their role is sufficient liquidity. Because there are many listed options trading contracts, trading is dispersed, and the focus of trading shifts with changes in market prices, market makers become the key to whether liquidity is sufficient or not.” The person in charge said that the Zhengzhou Commodity Exchange attaches great importance to the construction of the options market maker system and market maker business, and has previously carried out a series of preparatory work.
A reporter from Futures Daily observed that at the forum site, the topics discussed by the Zhengzhou Commodity Exchange and representatives of participating institutions focused on market maker coding, technical connections, contract allocation and quotation methods, fee discounts and obligation exemptions, and improving supervision. The topics were very specific and very practical. It is believed that with preparations by all parties in the market, agricultural product options will eventually “break out of the cocoon”.