• Short Term Gold Option Contract – Product Modification

      • To
      • Members, Member Firms and Market Users
      • From
      • Market Regulation Department
      • #
      • SER-6265
      • Notice Date
      • 14 June 2012
      • Effective Date
      • 01 July 2012
    • Effective Sunday, July 1, 2012, for trade date Monday, July 2, 2012, and pending all relevant CFTC regulatory review periods, the Commodity Exchange, Inc. (COMEX or Exchange) will amend its Short-Term Gold option contract (Chapter 1067, codes L01-L31) to exercise into the Gold futures contract. The contract is available for trading on CME Globex and the COMEX trading floor and for submission for clearing on CME ClearPort.
      The first daily option contract exercisable into a futures position shall be the July 10, 2012 expiration.  The daily option contract expiring on July 10, 2012 will be available for trading on trade date July 3, 2012. Any contracts available for trading and are set to expire prior to July 10 shall continue to settle financially. 
      As a result of the amendments to the option contract to allow for exercise into a futures position, the option will be subject to the Exchange physical delivery transaction fees.  The revised transaction fees and the rule amendments are presented below.
      Please refer questions to:
       
      Energy & Metals Research:
      Bob Biolsi                                 bob.biolsi@cmegroup.com                               212.299.2610
      Joann Arena                              joann.arena@cmegroup.com                             212.299.2356
       
      Metals Products & Services:
      Miguel Vias                               Miguel.vias@cmegroup.com                              212.299.2358


       
      (bold/underline indicates addition; strikethrough indicates deletion)
       
      Chapter 1067
      Short-Term Gold Option
      1067.03             TRADING UNIT
      For option contracts through July 9, 2012 expiration
      A Short-Term Gold put option contract traded on the Exchange represents the cash difference between the exercise price and the settlement price for the nearest February, April, June, August, October, or December Gold futures multiplied by 100, or zero, whichever is greater unless such expiration day is after the last trading day of the nearest February, April, June, August, October, or December Gold option contract, in which case it will represents the cash difference between the exercise price and the settlement price for the second nearest February, April, June, August, October, or December Gold futures multiplied by 100, or zero, whichever is greater.
      A Short-Term Gold call option contract traded on the Exchange represents the cash difference between the settlement price for the nearest February, April, June, August, October, or December Gold futures and the exercise price multiplied by 100, or zero, whichever is greater unless such expiration day is after the last trading day of the nearest February, April, June, August, October, or December Gold option contract, in which case it will represents the cash difference between the settlement price for the second nearest February, April, June, August, October, or December Gold futures exercise price and multiplied by 100, or zero, whichever is greater.
      For option contracts with expiration beginning July 10, 2012 and beyond
      A Short-Term Gold call option contract will be exercisable into a long futures position for the closest to expiry February, April, June, August, October, or December Gold futures contract, unless such expiration day is four business days or less prior to the end of the month closest to expiry February, April, June, August, October, or December Gold futures contract. If expiration occurs four business days or less prior to the end of the month closest to expiry, the contract will be exercisable into a long futures in the second closest to expiry February, April, June, August, October, or December Gold futures contract.
      A Short-Term Gold put option contract will be exercisable into a short futures position for the closest to expiry February, April, June, August, October, or December Gold futures contract, unless such expiration day is four business days or less prior to the end of the month closest to expiry February, April, June, August, October, or December Gold futures contract. If expiration occurs four business days or less prior to the end of the month closest to expiry, the contract will be exercisable into a short futures in the second closest to expiry February, April, June, August, October, or December Gold futures contract.
      1067.08             ABSENCE OF CONTRARY INSTRUCTIONS
      For option contracts with expiration beginning July 10, 2012 and beyond
      Notwithstanding other general rules of option exercise, Short-Term Gold options are automatically exercised if they are at least $0.10 in-the-money. No abandonments of in-the-money options and no exercise of out-of-the-money options will be allowed.
      [remainder of rule unchanged]
       
       


       
      Exchange Fees
       
      Short Term Gold Options
       

      Exchange Fees
      Member Day
      Member
      Cross Division
      Non-Member
      IIP
      Pit
      $0.45
      $0.70 (EOO $0.85)
      $0.95
      $1.45
      Globex
      $0.45
      $0.70
      $0.95
      $1.45
      NA
      ClearPort
      $0.70 (EOO $0.85)
      $1.45
      Processing Fees
      Member
      Non-Member
      Cash Settlement
      NA
      NA
      *only applies to financially settled contracts
      Futures from E/A
      NA
      NA
      *applies to futures contracts
      House Acct
      Cust Acct
      Options E/A Notice
      0.40
      0.85
      *applies to physical options
      Delivery Notice
      NA
      NA
      *applies to physical futures
       
       
      Additional Fees and Surcharges
      EFS Surcharge
      NA
      *$2.50 fee typically only charged on our core physical contracts
      Block Surcharge
      NA
      *$0.10 fee charged on block trades
      Facilitation Desk Fee
      $0.25
      *fee applies to CPC trades entered by ClearPort Market Ops

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