South American Short-Dated New Crop Soybean Options

The Short-Dated Options on the deferred (New Crop) months are early expiring options that reference the May Soybean Futures contract.

Benefits

  • Cost-effective: lower premiums due to less time value
  • Facilitate hedging early in the planting and growing season
  • Useful for hedging or trading around key agricultural reports, including South American local reports and USDA reports
  • Specifically hedges South American new crop exposure over a short time frame
  • Precise hedging tool tied to new crop price exposure

Features

  • Underlying: May futures contract
  • Five option contract months: July, September, November, January, and March
  • Listing cycle: On the first trading day following standard May option expiration, list the 5 option months referencing the next May futures

Product Codes

CME Globex Open Outcry Bloomberg Reuters CQG Propht X
SRS SRS SRSA Comdty 0#1SRS+ SRS @SRS

U.S. Version – a Success

  • As of Jan 2018, more than 7.56 million contracts have traded since launch in 2012
  • Over 2,985 contracts traded per day in 2017
  • Open interest record: 481,399 contracts on 7/13/15
  • Single day volume record: 116,579 contracts traded on 6/26/15

Contract Specifications

Contract Value One May Soybean futures contract of 5,000 bushels
Minimum Price Fluctuation 1/8 of one cent per bushel ($6.25 per contract)
Trading and Clearing Hours CME Globex Sunday – Friday, 7:00 p.m. – 7:45 a.m. CT and Monday – Friday, 8:30 a.m. – 1:20 p.m. CT
Open Outcry Monday – Friday, 8:30 a.m. – 1:15 p.m. CT with Post session until 1:20 p.m. CT immediately following the close
CME ClearPort Sunday – riday, 5:00 p.m. – 4:00 p.m. CT with a 60-minute break each day beginning at 4:00 p.m. CT
Product Code CME Globex: SRS CME ClearPort: SRS Open Outcry: SRS Clearing: SRS
Listed Contracts On the first trading day following standard CBOT Soybean March option expiration, list 5 contract months: July, September, November, next January, and next March.  Each of these options will exercise into the May futures contract that is nearest to the expiration of the option.  A new listing cycle will begin on the first trading day following the expiration of the next standard CBOT March option.
Termination Of Trading Unexercised Soybean futures options shall expire at 7:00 p.m. on the last day of trading.
Exchange Rulebook CBOT 11A
Strike Price Interval Trading shall be conducted for put and call options with strike prices in integral multiples of ten (10) cents per bushel. More details on strike price intervals are outlined in Rule 11A01.E.
Exercise Style The buyer of a futures option may exercise the option on any business day prior to expiration by giving notice to the Clearing House by 6:00 p.m. Chicago time. Option exercise results in an underlying futures market position. Options in-the-money on the last day of trading are automatically exercised.
Settlement Method Deliverable
Underlying Soybean Futures

DISCLAIMER:

Futures trading is not suitable for all investors, and involves the risk of loss. Futures are a leveraged investment, and because only a percentage of a contract’s value is required to trade, it is possible to lose more than the amount of money deposited for a futures position. Therefore, traders should only use funds that they can afford to lose without affecting their lifestyles. And only a portion of those funds should be devoted to any one trade because they cannot expect to profit on every trade. All references to options refer to options on futures.

Swaps trading is not suitable for all investors, involves the risk of loss and should only be undertaken by investors who are ECPs within the meaning of section 1(a)12  of the Commodity Exchange Act. Swaps are a leveraged investment, and because only a percentage of a contract’s value is required to trade, it is possible to lose more than the amount of money deposited for a swaps position. Therefore, traders should only use funds that they can afford to lose without affecting their lifestyles. And only a portion of those funds should be devoted to any one trade because they cannot expect to profit on every trade.

Any research views expressed are those of the individual author and do not necessarily represent the views of the CME Group or its affiliates. 

CME Group is a trademark of CME Group Inc. The Globe Logo, CME, Globex and Chicago Mercantile Exchange are trademarks of Chicago Mercantile Exchange Inc. CBOT and the Chicago Board of Trade are trademarks of the Board of Trade of the City of Chicago, Inc. NYMEX, New York Mercantile Exchange and ClearPort are registered trademarks of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. KCBOT, KCBT and Kansas City Board of Trade are trademarks of The Board of Trade of Kansas City, Missouri, Inc. All other trademarks are the property of their respective owners.

The information within this presentation has been compiled by CME Group for general purposes only. CME Group assumes no responsibility for any errors or omissions. Additionally, all examples in this presentation are hypothetical situations, used for explanation purposes only, and should not be considered investment advice or the results of actual market experience.

All matters pertaining to rules and specifications herein are made subject to and are superseded by official Exchange rules. Current rules should be consulted in all cases concerning contract specifications.

Copyright © 2018 CME Group. All rights reserved.

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