Assumption of ObligationOption on Commodity Futures Settlement Method
Option on Commodity Futures Settlement Method
Option on Commodity Futures Settlement Method
- Option on Commodity Futures will be settled through an option exercise or offsetting purchase/sale. Option on Commodity Futures can only be exercised on the next day following the last trading day (European Option), and the settlement related to exercise/assignment will be performed through payment/receipt of the difference between the exercise price and the special quotation (SQ)*.
* For Option Contracts, there will be a payment/receipt of the Option Premium on the next day following the trade date, but, unlike futures contracts, there will be no payment/receipt of mark-to-market differences.
- If no offsetting purchase or sale took place by the last trading day , ITM (in-the-money) issue will be settled through automatic exercise unless the Buyer waives the option, and, for OTM (out-of-the-money) issue, the position extinguishes unless the Buyer manually exercises the option.
* The special quotation (SQ) will be calculated based on the opening price of each product on the next day following the last trading day.
