Notice to Members
Notice No. 296 10/30/2002
Exchange To Add Long-Dated Natural Gas Calendar Spread Options Beginning November 1
The New York Mercantile Exchange, Inc., today announced that it would introduce on November 1 calendar spread options contracts for natural gas that are based on the differential of natural gas contracts that are six and 12 months apart. Calendar spread options, introduced in June for the Exchange's five major energy markets, are based on the differential between two months of trading in the same futures contract. Currently listed contracts are for any combination of the closest four months in each commodity and any pair of consecutive months during the first 13 listed months, as well as wider spreads that were available until now for the two crude oil contracts only. At exercise, the buyer of a put options contract receives a short position in the futures market for the closer month and a long position in the futures market for the further month. The buyer of a call options contract receives the reverse at exercise.
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