- Trading Screen Product Name
- Freight Futures (USD)
- Trading Screen Hub Name
- TD20
- Contract Symbol
WAC
- Hedge Instrument
The delta hedge for the TD20 FFA Average Price Option is the TD20
FFA Future (WAC).
- Contract Size
1,000 metric tonnes
- Unit of Trading
Any multiple of 1,000 metric tonnes
- Currency
US Dollars and cents
- Trading Price
One tenth of one cent ($0.001) per metric tonne
- Settlement Price
One hundredth of one cent ($0.0001) per metric tonne
- Minimum Price Fluctuation
One hundredth of one cent ($0.0001) 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 TD20 FFA Future (WAC) 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 TD20 FFA Average Price Option is a premium-paid-upfront option.
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 based on the average of the assessments as made public by the
Baltic Exchange for the relevant route for each business day (as
specified below) in the determination period.
When exercised against, the Clearing House, at its discretion,
selects sellers against which to exercise on a pro-rata basis.
- Strike Price Intervals
A minimum of 10 Strike Prices in increments of $0.01 per metric
tonne above and below the at-the-money Strike Price. Strike Price
boundaries are adjusted according to futures price movements.
User-defined Strike Prices are allowed in $0.01 increments.
- 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