Harmonization of final settlement prices for expiring out-of-the-money options on April 20, 2020

On the expiration date of an option, there has long been a difference in the way the final settlement price is published for out-of-the-money strikes between the New York products – NYMEX and COMEX – versus the Chicago ones – CME and CBOT. In particular, for NYMEX and COMEX options, beginning on expiration date, the final settlement price for out-of-the-money options is assigned as zero. For CME and CBOT options, however, the final settlement price for out-of-the-money strikes is assigned as its “fixed cabinet” value (half the normal tick for CME options, one dollar for CBOT options.) Effective on Monday, April 20, 2020, the behavior for CME and CBOT options will be made consistent with the behavior of NYMEX and COMEX options. Beginning on that date, CME and CBOT options which finish out-of-the-money will be assigned a final settlement price of zero.

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