Short Term Gold Option Contract ¿ Product Modification
To
Members, Member Firms and Market Users
From
Market Regulation Department
Advisory #
SER-6265
Notice Date
June 14, 2012
Effective Date
July 01, 2012
Effective Sunday, July 1, 2012, for trade date Monday, July 2, 2012, and pending all relevant CFTC regulatory review periods, the Commodity Exchange, Inc. (COMEX or Exchange) will amend its Short-Term Gold option contract (Chapter 1067, codes L01-L31) to exercise into the Gold futures contract. The contract is available for trading on CME Globex and the COMEX trading floor and for submission for clearing on CME ClearPort.
The first daily option contract exercisable into a futures position shall be the July 10, 2012 expiration. The daily option contract expiring on July 10, 2012 will be available for trading on trade date July 3, 2012. Any contracts available for trading and are set to expire prior to July 10 shall continue to settle financially.
As a result of the amendments to the option contract to allow for exercise into a futures position, the option will be subject to the Exchange physical delivery transaction fees. The revised transaction fees and the rule amendments are presented below.
Please refer questions to:
Energy & Metals Research:
Bob Biolsi bob.biolsi@cmegroup.com 212.299.2610
Joann Arena joann.arena@cmegroup.com 212.299.2356
Metals Products & Services:
Miguel Vias Miguel.vias@cmegroup.com 212.299.2358
(bold/underline indicates addition; strikethrough indicates deletion)
Chapter 1067
Short-Term Gold Option
1067.03 TRADING UNIT
For option contracts through July 9, 2012 expiration
A Short-Term Gold put option contract traded on the Exchange represents the cash difference between the exercise price and the settlement price for the nearest February, April, June, August, October, or December Gold futures multiplied by 100, or zero, whichever is greater unless such expiration day is after the last trading day of the nearest February, April, June, August, October, or December Gold option contract, in which case it will represents the cash difference between the exercise price and the settlement price for the second nearest February, April, June, August, October, or December Gold futures multiplied by 100, or zero, whichever is greater.
A Short-Term Gold call option contract traded on the Exchange represents the cash difference between the settlement price for the nearest February, April, June, August, October, or December Gold futures and the exercise price multiplied by 100, or zero, whichever is greater unless such expiration day is after the last trading day of the nearest February, April, June, August, October, or December Gold option contract, in which case it will represents the cash difference between the settlement price for the second nearest February, April, June, August, October, or December Gold futures exercise price and multiplied by 100, or zero, whichever is greater.
For option contracts with expiration beginning July 10, 2012 and beyond
A Short-Term Gold call option contract will be exercisable into a long futures position for the closest to expiry February, April, June, August, October, or December Gold futures contract, unless such expiration day is four business days or less prior to the end of the month closest to expiry February, April, June, August, October, or December Gold futures contract. If expiration occurs four business days or less prior to the end of the month closest to expiry, the contract will be exercisable into a long futures in the second closest to expiry February, April, June, August, October, or December Gold futures contract.
A Short-Term Gold put option contract will be exercisable into a short futures position for the closest to expiry February, April, June, August, October, or December Gold futures contract, unless such expiration day is four business days or less prior to the end of the month closest to expiry February, April, June, August, October, or December Gold futures contract. If expiration occurs four business days or less prior to the end of the month closest to expiry, the contract will be exercisable into a short futures in the second closest to expiry February, April, June, August, October, or December Gold futures contract.
1067.08 ABSENCE OF CONTRARY INSTRUCTIONS
For option contracts with expiration beginning July 10, 2012 and beyond
Notwithstanding other general rules of option exercise, Short-Term Gold options are automatically exercised if they are at least $0.10 in-the-money. No abandonments of in-the-money options and no exercise of out-of-the-money options will be allowed.
[remainder of rule unchanged]
Exchange Fees
Short Term Gold Options
|
Exchange Fees
|
||||||
|
Member Day
|
Member
|
Cross Division
|
Non-Member
|
IIP
|
||
|
Pit
|
$0.45
|
$0.70 (EOO $0.85)
|
$0.95
|
$1.45
|
||
|
Globex
|
$0.45
|
$0.70
|
$0.95
|
$1.45
|
NA
|
|
|
ClearPort
|
$0.70 (EOO $0.85)
|
$1.45
|
||||
|
Processing Fees
|
||||||
|
Member
|
Non-Member
|
|||||
|
Cash Settlement
|
NA
|
NA
|
*only applies to financially settled contracts
|
|||
|
Futures from E/A
|
NA
|
NA
|
*applies to futures contracts
|
|||
|
House Acct
|
Cust Acct
|
|||||
|
Options E/A Notice
|
0.40
|
0.85
|
*applies to physical options
|
|||
|
Delivery Notice
|
NA
|
NA
|
*applies to physical futures
|
|||
|
|
|
|||||
|
Additional Fees and Surcharges
|
||||||
|
EFS Surcharge
|
NA
|
*$2.50 fee typically only charged on our core physical contracts
|
||||
|
Block Surcharge
|
NA
|
*$0.10 fee charged on block trades
|
||||
|
Facilitation Desk Fee
|
$0.25
|
*fee applies to CPC trades entered by ClearPort Market Ops
|
||||