Notice to Members
Notice No. 281
10/22/2002
Reminder Regarding COMEX Division Rule 4.02(c), Post Settlement Session
The COMEX Governors Committee is currently in the process of reviewing and revising its Rule 4.02(c), Post Settlement Session (Rule language to follow). While changes are expected to be finalized shortly, during the review, a question was raised concerning the execution of spread transactions in the post close session under the current guidelines. It was represented that some members believed spreads could only be executed at the differential between the settlement prices in the effected months. This, however, is not correct. Spreads executed in the post settlement session may be executed at a differential value taking into consideration the allowable ticks above and below the settlement price (or as permitted by the rule) in the effected contract months, but otherwise in compliance with the requirements of Rule 4.02(c).

Any questions should be directed to David Schneiderman, Director Trade Practice Surveillance, at (212) 299-2857, Nancy Minett, Compliance Counsel, at 299-2940, or Thomas LaSala, Senior Vice President, Compliance and Risk Management, at 299-2897.


Current COMEX Rule 4.02(c)

(c) Post-Settlement Session. Immediately following the establishment of the settlement price in all metal futures or option contracts, trading shall resume for a period of three minutes, subject to the following conditions:

  1. A floor member may execute trades for his own account and for the account of another member present on the trading floor without further limitation of section (c)(2) of this Rule;


  2. During the post-settlement session, a floor member shall bid or offer all non-discretionary orders received and time-stamped on order tickets on the trading floor prior to the close of the market which, (A) with respect to futures options, were executable at the settlement price and (B) with respect to futures, were executable during the price range established by section (c)(4), which have not been expressly withdrawn;


  3. The trade price of all options transactions executed during the post-settlement session shall be the settlement price established for the futures option traded;


  4. Futures trades occurring during the post-settlement session shall be executed openly and competitively at a price within the following range of minimum price fluctuations ("ticks") above and below the settlement price of the applicable futures contract;

    (A) Grade 1 Copper Futures 3 ticks
    (B) Gold Futures 4 ticks
    (C) Silver Futures 3 ticks
    (D) Aluminum Futures 3 ticks

    In the event the range of prices during the closing range is narrower than the ranges set forth above, then the range of prices for trades executed during the post settlement session shall be limited to the range of prices during the closing range. Furthermore, if the range of ticks set forth above exceeds the high or low price established during the post settlement session shall be limited by either the high or low price of the closing range which was exceeded.

    In the event the settlement price as determined in accordance with COMEX Rules 6.15 and 6.18 is outside the range of prices established during the closing period, all trades occurring during the post settlement session shall be executed within the range of minimum price fluctuations above and below the settlement price of the applicable futures contract.


  5. Prices for trades executed during the post settlement session shall not be reported on public ticker services as current market prices and trades executed during the post settlement session shall not be considered in determining any settlement price; and


  6. Floor members executing trades during the post settlement session shall mark a line across their trading cards prior to the entry of a post settlement session trade. (Rule 4.02 Amended 12/11/98)
Should you have any questions or require any further information, please contact exchangeinfo@nymex.com