TC14 FFA-USGC To Continent (Baltic) Average Price Option26535738

Description

The TC14 FFA Average Price Option is based on the underlying TC14 FFA Future (WCN) and will automatically exercise into the settlement price of the Future on the day of expiry of the options contract.

Market Specifications

Trading Screen Product Name
Freight Futures (USD)
Trading Screen Hub Name
TC14
Commodity Code
WCN
Hedge Instrument
The delta hedge for the TC14 FFA Average Price Option is the TC14 FFA Future (WCN).
Contract Size
1,000 metric tonnes
Unit of Trading
Any multiple of 1,000 metric tonnes
Currency
US Dollars and cents
Trading Price
One cent ($0.01) per metric tonne
Settlement Price
One tenth of one cent ($0.001) per metric tonne
Minimum Price Fluctuation
One tenth of one cent ($0.001) per metric tonne
Last Trading Day
Last Trading Day of the contract month
Option Style
Options are average priced and will be automatically exercised into the TC14 FFA Future on the expiry day if they are "in the money". The Future resulting from exercise immediately goes to cash settlement relieving market participants of the need to concern themselves with liquidation or exercise issues. If an option is "out of the money" it will expire automatically. It is not permitted to exercise the option on any other day or in any other circumstances than the Last Trading Day. No manual exercise is permitted.
Option Premium / Daily Margin
The TC14 FFA Average Price Options are premium-paid-upfront options. The traded premium will therefore be debited by the Clearing House from the Buyer and credited to the Seller on the morning of the Business Day following the day of trade. Members who are long premium-paid-upfront options will receive a Net Liquidating Value (NLV) credit to the value of the premium which is then used to offset the initial margin requirement flowing from both these options and positions in other energy contracts. Members who are short premium-paid-upfront options will receive an NLV debit in addition to their initial margin requirement. NLV is calculated daily with reference to the settlement price of the option.
Expiry
16:30 London Time.

Automatic exercise settings are pre-set to exercise contracts which are one minimum price fluctuation or more "in the money" with reference to the relevant reference price. Members cannot override automatic exercise settings or manually enter exercise instructions for this contract.

The reference price will be a price in USD and cents per metric tonne equal to the arithmetic average of the settlement prices of the Baltic TC14 FFA for the contract month. When exercised against, the Clearing House, at its discretion, selects sellers against which to exercise on a pro-rata basis.
Strike Price Intervals
This contract will support Custom Option Strikes with strikes in increments of $0.01 within a range of $2 to $35. This range may be revised from time to time according to future price movements. The at-the-money strike price is the closest interval nearest to the previous business day's settlement price of the underlying contract.
Contract Series
Up to 48 consecutive months
Final Payment Date
Two Clearing House Business Days following the Last Trading Day
Business Days
Publication days for Baltic Exchange
MIC Code
IFEU
Clearing Venues
ICEU