The Shanghai Futures Exchange ("SHFE") has recently issued the Cathode Copper Futures Options Contract (Draft for Comment) (the "Draft for Comment"), the Administrative Measures for the Trading of Options (Draft for Comment), the Administrative Measures for Options Market Markers (Draft for Comment), the Administrative Measures for the Suitability of Options Investors (Draft for Comment) and other amended accompanying implementing rules, to seek opinions from the industry by August 16, 2018.
According to the Draft for Comment, there are two types of copper options contracts, one for call options and the other for put options; the trading unit is five tons per lot for the copper options contract; the minimum price fluctuation is CNY1/ton; the up and down limit range shall be same as that of the copper futures contract; the contract series are same as that of listed futures contract of subject matters; and the exercise price is within the up or down limit range on the current day, up or down of the settlement price of the previous trading day for the copper futures contract. Where the exercise price does not exceed CNY40,000/ton, the gap between two prices shall be CNY500/ton up or down; where the exercise price is higher than CNY40,000/ton but no higher than CNY80,000/ton, the gap between two prices shall be CNY1,000/ton up or down; where the exercise price surpasses CNY80,000/ton, the gap between two prices shall be CNY2,000/ton.