China launches second exchange-traded agricultural commodity option

Updated 2017-04-19 14:30:52 chinadaily.com.cn

Zhengzhou Commodity Exchange launched white sugar options on Wednesday to enhance risk management tools of agro-related enterprises, following soybean meal options, the first agricultural commodity options in China.

The launch is in response to the No 1 Document 2016 issued by the central government which stated that it is necessary to "create agricultural futures varieties and carry out agricultural options pilot".

By 11:25 am, a total of 35,866 units of trading had been conducted, according to the exchange. Each trading unit is 1 lot (10 tons) of sugar futures contract and the minimum change in the price is 0.5 yuan per ton; the exercise way is American option. In terms of differences, the price limit range of sugar options is the same as that of sugar futures contract, namely 4 percent. In addition, the sugar options have taken market maker system. Ten market makers, including Zhejiang Nanhua Capital Management Co Ltd, were announced last Wednesday.

The term "option" refers to the right of the buyer to buy or sell a certain commodity or financial instrument in certain quantity in accordance with the predetermined price within the agreed time limit. Option is a mature basic risk management tool in international derivatives market and constitutes a complete risk management tool system in commodity market together with futures, forwards and swaps.

Also in the News

Nicole Kidman Recalls Oscar Glory: Loneliest Time
Showbiz2016/06/16 13:58August 18 2017 09:21:47

Nicole Kidman Recalls Oscar Glory: Loneliest Time

Attending Shanghai International Film Festival, Nicole Kidman talks about her role in "Grace of Monaco".

Labor Day Travel Peak Starts
Also in the News2014/05/01 12:16August 18 2017 09:21:47

Labor Day Travel Peak Starts

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'
Also in the News2014/04/18 13:18August 18 2017 09:21:47

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'

Hollywood star Johnny Depp's speech in the upcoming new film "Transcendence" has been disclosed on Friday, April 11th.

Most Watched

News:
China World Business Sports Showbiz Audio
Video:
C4 My Chinese Life The Sound Stage China Revealed Showbiz Video Travel Video
Photos:
China World Fun Travel Entertainment Sports
Travel:
Beijing Shanghai Guangzhou
Lifestyle:
Live Music Opera & Classical Movies Traditional Shows Exhibitions
Learn Chinese:
Chinese Studio Living Chinese Everyday Chinese Just For Fun Chinese Culture Buzzwords