CME Group will launch cleared over-the-counter (OTC) options on physical agricultural commodities beginning 24 August.
Clearing will be available through CME ClearPort(R). These contracts are listed by the CBOT for clearing only through CME ClearPort, and are subject to CBOT rules and regulations.
The exchange will launch 10 OTC cash-settled options products for clearing: European- and Asian-style options on corn, wheat, soybeans, soybean meal and soybean oil. These are in addition to the listed cleared OTC agricultural swaps already available for clearing through CME ClearPort.
“These two types of options on grains and oilseeds will enable market participants to not only privately negotiate the option contract terms but they also will receive the safety and benefits of having them cleared through CME Clearing, virtually eliminating counterparty credit risk,” says Barry Goldblatt, managing director of Commodity, Energy and Metals Products and Services, CME Group. “Our customers said they want to have the flexibility to define option strike prices as well as their month and quantity so they can better tailor trades to more precisely fit their portfolio management needs.”
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