A critical event in the life of an option occurs at its expiration. The option is either exercised into an underlying future or it is expired with no further risk. This event is very important to option traders as they may need to adjust their positions based on the exercise result.
CME Group FX options currently have a 2PM Central Time expiration. This is convenient for North American traders but not so timely for other global participants.
Based on input from CME Group customers and to better align with OTC Market conventions, CME Group’s FX options expiration time will be changed to expire at 10am New York time, making it more convenient for market participation regardless of geographical location.
The expiration time will change to 10am New York for all FX option contracts expiring after June 9th, 2019.
However, some of these contracts will begin trading sooner – starting with the September 2019 quarterly options – which are listed and start trading in September of 2018.
The 10am New York or 9am Chicago Fix value will be used to determine CME’s FX option auto-exercise process. This will not change the current Globex codes for options.
However, CME systems will continue to reference Chicago time for consistency – so market participants will see the 10 am New York appear as 9 am Central time for trading and clearing systems.
Expiration time is an important aspect of options trading, but it shouldn’t affect the ability to participate in the market. With the FX options expiration time change, everyone can participate regardless of their current location.
Get ready for the 10am expiration now aligned to OTC market convention. Find out more at cmegroup.com/10am.