CME Group, the world’s leading and most diverse derivatives marketplace, today announced the launch of short-term options contracts for Gold, Crude Oil and Natural Gas to begin trading July 16. Short-term crude oil and natural gas options contracts are listed with, and subject to, the rules and regulations of NYMEX. Short-term gold options contracts are listed with, and subject to, the rules and regulations of COMEX.
“Recent global macroeconomic events and volatility underscore the need for tools to enable market participants to manage their basis risk every day,” said Harriet Hunnable, managing director, Metals Products, CME Group. “Our innovative new short-term gold options contracts will provide customers with much greater flexibility to manage the risk associated with government economic data, world events and other market-moving factors, while enabling them to benefit from the lower cost associated with short-dated options.”
Similar to the E-micro Gold futures contract, which launched in Q4 of 2010, short-term gold options also represent a cost-effective means for professional investors to gain exposure to gold.
These new short-term options contracts will have daily expiration dates listed up to five days in advance. Short-term gold options will run off the standard strike prices and the cycle month futures contract. Whereas, short-term natural gas and crude oil options will run off standard strike prices and the standard front-month futures contract.
“Customers have expressed a specific interest in short-dated options to allow them the flexibility to execute a variety of trading strategies over shorter time periods,” said Mike Prokop, Managing Director, Energy Products, CME Group. “Additionally, regional crude oil and natural gas storage data, weather anomalies and other macroeconomic factors can have a dramatic impact on the energy markets. These new short-term crude oil and natural gas options contracts will enable market participants to better manage that kind of event risk.”
Short-term gold, crude oil and natural gas options will be cash settled European style and will be listed for electronic trading on CME Globex and clearing through CME ClearPort®. Following the first week of listing, expirations will be every business day, except for those days when there is an associated gold, crude oil or natural gas options expiration.
