• Amendments to the Strike Price Increments of the Silver Option Contract

      • To
      • Members, Member Firms and Market Users
      • From
      • Research and Product Development
      • #
      • 6662R
      • Notice Date
      • 31 May 2013
      • Effective Date
      • 02 June 2013
    • This SER supersedes SER 6662 dated May 8, 2013 and provides corrections to nonsubstantive typographical errors.
       
      Effective Sunday, June 2, 2013 for trade date Monday, June 3, 2013 the Commodity Exchange, Inc. (COMEX or Exchange) will amend the Silver Option contract (code: SO, rule chapter 116) and amend Rule 116.03 (“Strike Prices”) to increase the strike price increment from $0.05/troy ounce increments to $0.25/troy ounce increments. In the event that silver prices fall to below $10/troy ounce, the Exchange will list $0.10 strike price increments in addition to the $0.25 increments. Silver options are available for trading on the COMEX trading floor and CME Globex, and for submission for clearing through CME ClearPort. These amendments will be reflected on all venues.  
       
      Specifically, the Silver option strike price listings will expand from six (6) to twenty (20) strike prices above and below the at-the-money option for the trading on the COMEX trading floor and CME Globex. For Silver options to be cleared through CME ClearPort, strikes prices will be added on an as-needed basis in addition to the regular strike price listing schedule.
       
      The Exchange shall provide notification to the Commodity Futures Trading Commission of the amendments to the respective “Strike Prices” rule for the Silver Option contract, in order to reflect the increase of the strike price increments, within one week following the effective date of the amendment. 
       
      The rule amendmentis provided below:
       
        
       
      (underline reflects addition; strikethrough reflects deletion)
      Chapter 116
      Silver Option
       
       
       
       116.03. STRIKE PRICES
       
       For all months:
      (a) Strike prices will be listed with If the underlying futures price is less than $25.00 per ounce, forty (40) strike prices in $0.05 increments above and below the at-the-money strike price will be listed; and forty (40) strike prices in $0.25 increments above and below the at-the-money strike price. above and below the highest and lowest $0.05 increment, respectively, will be listed; and ten (10) strike prices in $1.00 increments above and below the highest and lowest $0.25 increment, respectively, will be listed.
      If the underlying futures price is lessgreater than $1025.00 per ounce, tenforty (140) strike prices in increments of $0.1025 above or below the at-the-money strike price will be listed in addition to the $0.25 increment.; and forty (40) strike prices in $1.00 increments above and below the highest and lowest $0.25 increment, respectively, will be listed.
      (b) Notwithstanding the provisions of section (a) of this Rule 116.03, if the Exchange determines that trading in silver option contracts will be facilitated thereby, the Exchange may, by resolution, change the increments between strike prices, the number of strike prices which shall be traded on the first day in any new option contract month, the price of the silver futures contract at which a new strike price will be introduced, or the period preceding the expiration of a silver option contract in which no new strike prices may be introduced.
      (c) In addition to strike prices authorized pursuant to other sections of this Rule 116.03, the Exchange may direct that additional strike prices be added.
       
       
       
      Metals Research:
      Bob Biolsi                                 bob.biolsi@cmegroup.com                               212.299.2610
      Joann Arena                              joann.arena@cmegroup.com                             212.299.2356
      Young-Jin Chang                       youngjin.chang@cmegroup.com                        312.466.4637

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