New Options Offset Service Frequently Asked Questions

Frequently Asked Questions

1. What is the new offset service?

Beginning on trade date December 15, 2016, and pursuant to CME Rule 855 (“Offsetting Different Sized Futures Positions and Options Positions”), CME will offer the capability to offset existing options positions in the European-style S&P 500 options and E-mini S&P 500 options.

2. Which options are eligible for the offset service?

European-style S&P 500 and E-mini S&P 500 options of the same strike, type (put or call) and expiration are eligible for the offset service. In order for an offset to occur between European-style S&P 500 and E-mini S&P 500 options, the positions must have identical expiration dates, exercise prices, and option type (call or put), and must be in a 1:5 ratio of standard-size options to E-mini-size options.

The following products will be eligible for offsets:

S&P 500 Options

Standard-Size Options

E-mini Options

End-of-Month EV EW
Weekly EV, EV2, EV3, EV4 EW1, EW2, EW3, EW4
Wednesday Weekly S1C, S2C, S3C, S4C, S5C E1C, E2C, E3C, E4C, E5C
Monday Weekly S1A, S2A, S3A, S4A, S5A E1A, E2A, E3A, E4A, E5A

3. Which options are not eligible for the offset service?

American-style, quarterly options are not eligible for the offset service.

4. Is the offset service automatic?

No – the offset service is voluntary.

5. Who may use the offset service?

The offset service is available only for accounts that have the same underlying beneficial ownership.

6. How do I access or request this service?

Firms must contact their clearing firm to request the offset service. Subsequently, the clearing firm must enter the offset instructions into the clearing system by 7:00 p.m. Central Time (CT) on a normal business day.

7. How does this service work in practice? Provide an example.

Suppose you are long two EV puts and short ten EW puts at the same strike price and expiration. The new offset service allows you to instruct your clearing firm to enter “fungible transfer” transactions into FEC – a sell of two EV put contracts and a buy of ten EW puts – to offset your positions.

8. Are there fees associated with this service?

Yes – there is a $0.05 fee per contract ($0.30 per 1x5 offset).

9. Can I offset options that were traded today? Or do they need to clear first?

Yes – you can offset options that you traded today.

10. Where can I get more information?

View Clearing Advisory 16-500 for more details.

For more information, contact:
CME Clearing
+1 312 207 2525