Design And Realization Of ZCE Option Rules

As an important financial tool in the modern financial markets, optionshave been developed rapidly on a global scale because of its flexibility ininvestment strategy. At present, most of the listed futures in developedcountries have a complete set of options trading in the market. It has become aconsensus of the international derivatives market that futures and options bothsupplement each other. But, our country has not yet been launched optionstrading in the futures market.In recent years, China’s futures market has achieved more advancedmarket structure and investors become more rational, which provided a goodfoundation for the setting up of commodity options market. Launchingcommodity option market could not only to perfect the market structure offutures market, but also improve the allocation of resources and the realeconomy.Zhengzhou Commodity Exchange has begun the research of options from1995, and set up a team to prepare for listing since then. In the past18years,the exchange has simplified option trading regulation based on combininginternational practice and China’s reality, and improved liquidity in the marketunder the condition of effective risk control. At the same time, the exchange’strading system is being optimized and investor education programs are beingcarried out orderly. In addition, the market-making system is introduced toimprove the options market liquidity.In listed futures varieties, Zhengzhou Commodity Exchange has chosensugar futures as pilot program following the principles of large market scale,good liquidity and reasonable volatility. From September to November in2013, Zhengzhou Commodity Exchange is holding the sugar options simulationtrading oriented to the whole market. During the simulation trading, thetrading is active, market price moves reasonable, and the trading systemsconnect well. Through this simulation trading, the former preparations arefully inspected again, which shows that the detailed regulations are validated,the system modules are joined smoothly, and traders are trained by practice. Intotal, the goals of the simulation transaction are achieved.Overall, Zhengzhou Commodity Exchange has solid preparations forlaunching option on all aspects. It is ready for launching sugar options tradingnow. Zhengzhou Commodity Exchange will continue to put resources andmanpower into perfect the options regulations and trading system forcommodity options listing.