Frequently Asked Questions: Black Sea Wheat and Corn Financially-Settled (Platts) Options

What is the underlying instrument?

The underlying reference instrument for the Black Sea Wheat Financially-Settled (Platts) options contract (BWO) is the Black Sea Wheat Financially-Settled (Platts) futures contract (BWF).

The underlying reference instrument for the Black Sea Corn Financially-Settled (Platts) options contract (BSO) is the Black Sea Corn Financially-Settled (Platts) futures contract (BCF).

How do BWO and BSO exercise?

Both contracts exercise into cash, and not into futures. The BWO and BSO exercise style is European.

How are the final settlement prices of the options contract determined?

The BWO final settlement price is the same as that for the BWF. For both, the final settlement price is equal to the arithmetic average of the Russian Wheat 12.5% Fob Black Sea Deep Water price assessments published by Platts for each day of the full calendar month period, rounded to the nearest $0.01.

The BSO final settlement price is the same as that for the BCF. For both, the final settlement price is equal to the arithmetic average of the Ukrainian Corn Fob Black Sea price assessments published by Platts for each day of the full calendar month period, rounded to the nearest $0.01.

Are there price limits?

There are no price limits on BWO or BSO.

The options contracts are available on CME ClearPort for submission for clearing. How does it work?

Subject to certain requirements met, such as minimum size, the options contract can be privately negotiated as a block trade and registered through CME ClearPort for clearing.

What are the requirements for block trade?

There are minimum quantity and reporting time requirements for block trades. The minimum block size is five lots, and trades need to be reported within 15 minutes of execution.

What are the hours for trade entry on CME ClearPort for clearing?

Trades may be entered on CME ClearPort Sunday – Friday from 5:00 p.m. to 4:00 p.m. Central Time (CT), with a 60-minute pause each day from 4:00 p.m. to 5:00 p.m. CT.

Are trades executed at 1:30 p.m. U.S. Central Time for today or tomorrow’s trade?

All trades executed through 4:00 p.m. U.S. Central Time will be considered today’s trade.

What are the position limits?

The Black Sea Wheat Financially-Settled (Platts) options and futures contracts have a combined spot month limit of 2,500 contracts. Single month accountability level and all month accountability level are both set at 5,000 contracts.

The Black Sea Corn Financially-Settled (Platts) options and futures contracts have a combined spot month limit of 600 contracts. Single month accountability level and all month accountability level are both set at 1,200 contracts.

What is the listing schedule?

Black Sea Wheat and Corn Financially-Settled (Platts) options are listed over 12 consecutive months.

I am a bona fide hedger and I need to exceed position limits. Can I apply for a hedge exemption?

Yes, you can apply for a hedge exemption.

Market participants may be eligible to receive an exemption from position limits in accordance with Rule 559 based on having bona fide hedging positions (as defined by CFTC Regulation §1.3(z)(1)), risk management positions and/or arbitrage and spread positions.

To obtain an exemption application, or for further information on the exemption application process, please contact hedgeprogram@cmegroup.com.

How do I start trading this contract?

There are various ways you can begin trading these contracts, depending on your situation. To trade the BWO and BSO as blocks, follow the process below.

Step 1: Register on CME ClearPort by contacting: blacksea@cmegroup.com

Step 2: Appoint a Broker(s) who services this market

Step 3: Request your CME Group clearing firm to permission your chosen Broker(s) for trade submission

Contact your clearing firm or for more help, contact: blacksea@cmegroup.com

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