- What product is being launched and when?
- What is the product code?
- What is the Rulebook chapter?
- How will this contract settle on a daily basis?
- When will this contract expire?
- What does a “physically delivered” options contract mean?
- What is the tick size for this new contract?
- How are Urea U.S. Gulf options contracts margined?
- What exercise and premium style will the options contract follow?
- What is the listing cycle?
- What are the strike generation rules?
- How can these contracts be traded?
- What are the hours for trading on CME ClearPort and on CME Globex?
- Who do I contact for more information?
1. What product is being launched and when?
CME Group is launching options on Urea (Granular) FOB U.S. Gulf futures on the CBOT Designated Contract Market (DCM).
The options contract is 100 tons and physically delivered into 1 futures contract.
The first trade date is March 25, 2024. April 2024 will be the first listed month available for trading and clearing.
2. What is the product code?
The product code for the options contract is UGO. The product code for the underlying futures contract is UFV.
3. What is the Rulebook chapter?
The rulebook chapter for Urea U.S. Gulf options is CBOT 41A.
4. How will this contract settle on a daily basis?
The daily settlement time will be 14:30 CT each day and will be settled based on contributions from active brokers in the Fertilizer market. The daily published ranges from both Price Reporting Agencies (PRAs) will also be used in the spot month daily settlement calculation.
5. When will this contract expire?
Trading shall cease on the last business day of the contract month which is also a Profercy and/or ICIS publication date for the price assessment. The options contract will expire into the underlying futures contract.
6. What does a “physically delivered” options contract mean?
Upon expiration, the option contract will be physically delivered into the expiring cash settled Urea U.S. Gulf futures contract.
7. What is the tick size for this new contract?
The tick size for options will be $0.25 per ton ($25 per contract) quoted in dollars and cents per ton.
8. How are Urea U.S. Gulf options contracts margined?
Urea U.S. Gulf options follow the same margining style as other CBOT Agricultural options.
9. What exercise and premium style will the options contract follow?
- Exercise: The option will be an American style option, which can be exercised at any time prior to expiration.
- Premium: The option will be an Equity style option (Premium paid up front).
10. What is the listing cycle?
Urea U.S. Gulf options will list monthly contracts for 12 consecutive months.
11. What are the strike generation rules?
Strikes are listed for 50% of the underlying settlement price above and below the at-the-money strike at $5 per ton increments.
12. How can these contracts be traded?
The contracts are available for trading on the CME Globex electronic trading platform and for submission for clearing via CME ClearPort.
The Block minimum for the option is two contracts.
13. What are the hours for trading on CME ClearPort and on CME Globex?
- CME Globex: Sunday – Friday 5:00 p.m. – 4:00 p.m. CT with a 60-minute break each day beginning at 4:00 p.m. CT.
- CME ClearPort: Sunday 5:00 p.m. – Friday 5:45 p.m. CT with no reporting Monday – Thursday from 5:45 p.m. – 6:00 p.m. CT.
14. Who do I contact for more information?
Chicago
- Alison Coughlin
+1 312 338 7171
alison.coughlin@cmegroup.com - Tom Crane
+1 312 930 2032
tom.crane@cmegroup.com
London
- Jeffry Kuijpers
+44 203 379 3729
jeffry.kuijpers@cmegroup.com
All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
