Grain Calendar Spread Options

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A New Way to Manage the Spread Risk Between Calendar Months

Corn Calendar Spread Options
Wheat Calendar Spread Options
Soybean Calendar Spread Options
Soybean Meal Calendar Spread Options
Soybean Oil Calendar Spread Options

Dynamic Strikes for Soybean Board Crush Spread Options and Calendar Spread Options

In response to customer demand, effective trade date Monday, September 28, 2009, Soybean Board Crush Spread Options and Calendar Spread Options on grain and oilseed products will be eligible for dynamically listed strike prices. Strike prices that conform to existing strike increments and are not already listed may be added dynamically during a trading session in order to better respond to market conditions. Strikes will be implemented the same day on the trading floor and the following business day on the Globex platform.

Contact CME Group Commodities for more information

Calendar Spread options (CSOs) offer a new way to manage the spread risk between calendar months.

CSOs are options on the price differential between 2 contract months, rather than on the underlying asset itself. Therefore, they offer alternative hedging capabilities compared to standard options, and can provide a more precise hedge against adverse movements in price spreads in the grain and oilseed markets.

Calendar spread options are sensitive to the value and volatility of the spread itself, rather than the price of the underlying commodity. They are more efficient than combining options on 2 different months in an effort to replicate the spread, and provide a better risk management device for hedgers and market participants exposed to calendar spread risks.

Listing Cycles:

Corn
Consecutive*
JULY-DEC**
DEC-JULY
DEC-DEC

Wheat
Consecutive*
DEC-JULY**
JULY-DEC
JULY-JULY

Soybean
Consecutive*
JULY-NOV**
JAN-MAY
NOV-JULY
NOV-NOV

Soybean Oil
Consecutive*
JULY-DEC**

Soybean Meal
Consecutive*
JULY-DEC**

*Formerly named "Nearby"
**Formerly named "Old Crop / New Crop"

The three consecutive futures calendar spreads and the longer dated spreads will be listed at all times. When the existing longer dated spreads expire the corresponding longer dated spreads for the following year will be listed.

Resources
Grain and Oilseed Calendar Spread Options Fact Card (PDF) UPDATED – CSO Symbols and Strike Increments Introduction to Calendar Spread Options Benefits and Examples 7/6/09 SER: Expansion of CSO Listings and Strike Increment Changes

Grain and Oilseed CSOs offer:

•	Customization Precise hedges geared to your exposure to temporal risk
•	Opportunities Protection against adverse price moves along with access to favorable moves
•	Choice of venue Trading floor or CME Globex electronic platform
•	Liquidity Dedicated and active market makers on the trading floor and on CME Globex
•	Security Centralized clearing and guaranteed counterparty credit

For more information, please contact:

Chicago Office Susan Sutherland Associate Director CME Group Products and Services 312-930-2325 susan.sutherland@cmegroup.com	London Office Jeffry Kuijpers Associate Director Commodity/Alt. Investment Products 011 (44) 207-796-7108 jeffry.kuijpers@cmegroup.com
Chicago Office Brenda Tucker Associate Director CME Group Products and Services 312-454-8304 brenda.tucker@cmegroup.com	Singapore Office Nelson Low Director Commodity Products Asia 11-656-550-9621 nelson.low@cmegroup.com

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