Cash-settled options on Ethanol futures:
Ethanol Calendar Swaps enable the biofuels and other industries to take advantage of the benefits of centralized clearing, including daily mark-to-market margining and reduced counterparty risk. Traded off exchange between individual counterparties, these contracts are centrally cleared through CME Clearing – providing world-class risk management of the credit, operational and legal risks that customers face in OTC trading.

Things to Know:

• Contracts represent half the size of Ethanol futures
• Settlement prices are derived from the monthly average of the underlying forward month Ethanol futures contract
• Cash settlement takes away the peculiarities associated with physical ethanol deliveries
• Convenient clearing hours provide opportunities across all time zones
• Risks associated with longer dated transactions can be effectively managed