The CSRC Approves The Date Of Signing The Cotton Option Contract On January 28Th.

In January 21st, Zhengshang issued cotton options contracts and related issues. The Commission announced that the date of listing of cotton options contracts was January 28th.

It is understood that the cotton option contract has been deliberated and passed by the Zhengshang board of directors and submitted to the China Securities Regulatory Commission for the record.

During the design and formulation of cotton option contracts, Zhengshang fully listened to all parties and experts in the market.

In December 28, 2018, Zheng Shang made public comments on cotton option contracts and related business rules for the whole market.

According to the official solicitation, some opinions and suggestions have been reflected in the symposium in the preliminary investigation, and Zheng business has adopted it in the contract design process.

Therefore, in the public market opinion, the market parties did not propose substantive amendments.

In January 7, 2019, the Council convened by Zheng Shang passed the cotton option contract.

Generally speaking, all parties in the market agree with the cotton option contract. They think that the cotton option contract is clear in expression, reasonable in terms, and accords with the reality and maneuverability of our market.

According to the circular, the futures contracts for cotton options listed on January 28th are: CF1905, CF1907, CF1909 and CF2001, the most recent month is May 2019, and the rest are July 2019, September and January 2020.

According to the cotton option contract, each futures contract will correspond to 1 flat option contracts, 6 real options contracts and 6 virtual options contracts, divided into two types of call options and put options, the first day the number of listed options contracts is 104.

On the basis of the benchmark price, Zhengshang calculates the benchmark price of each option contract based on the option pricing model.

The implied volatility parameters are determined according to the historical volatility of cotton futures and market makers' opinions, and the interest rate parameters are one-year loan benchmark interest rate (currently 4.35%).

The listing benchmark price will be published on the "paction data" column of Zhengshang website after the settlement in January 25th.

In terms of listing and night trading time, Zheng's decision on cotton option contract was launched on January 28, 2019 (Monday), and 8:55~9:00 was the aggregate auction time on that day.

In late January 28th, cotton option contracts were launched at night.

It is understood that cotton futures on the night before the night of the listing, all varieties futures and sugar options trading normally carried out.

In order to ensure the smooth operation of the cotton option market, Zheng also formulated targeted measures.

In terms of the maximum order quantity, the maximum order quantity of the limit order is 100 hands, and the maximum order quantity of the market order is 2 hands.

In terms of warehousing, non Futures Company members and customers hold 6000 hands on speculative contracts on a one-month option contract to meet the needs of cotton business and investment institutions.

In addition, speculation and arbitrage positions should not exceed 2 times the speculative position limit. Speculative, arbitrage and hedging positions should not exceed 3 times the speculative position limit. According to this calculation, the maximum interest rate of arbitrage positions in a month is 12000, and the maximum holding rate is 18000.

For enquiry limit, the time interval between the inquiry of the same option contract shall not be less than 60 seconds, and the market quotation is less than or equal to that of the market maker in response to the maximum bid ask spread.

In addition, in order to facilitate the cultivation of cotton option market and rational participation of investors, according to the contract value ratio and fluctuation of cotton option, Zheng merchants also made clear that the cotton option trading fee was 1.5 yuan / hand, which was free from the paction fee of the current and current warehouse pactions.

The standard of collecting fees is 1.5 yuan / hand, and the futures position is not charged.

According to introducing, cotton option and sugar option and domestic commodity option fee standard are basically the same.

In accordance with the goal of "ensuring the smooth and healthy development of cotton options", Zheng Shang has meticulously organized and co ordinated arrangements to organize the two cotton option joint market survey and joint adjustment, and has formulated a complete guarantee measure to ensure the steady start of cotton options.