[focus] how to invest aluminum and zinc options on the first day of trading on Monday

SMM: aluminum and zinc options were officially listed for trading on the Shanghai Futures Exchange on August 10. At that time, the number of options in the previous period will reach 5, and the number of trading varieties in China's commodity option market will be increased to 18.

Tang Guojing, general manager of Huatai Great Wall Capital Management Co., Ltd., said that the aluminum and zinc options launched in the last period will help enrich corporate risk management tools and strategies, and at the same time improve the effectiveness of over-the-counter option pricing and enrich the risk hedging means of over-the-counter options. the coordination of over-the-counter options will actively give full play to the function of the futures market and further promote the development and upgrading of the domestic financial derivatives market.

Aluminum options listed on the first day of AL2010, AL2011, AL2012 and AL2101 corresponding option contracts. Zinc options are listed on the first day of the ZN2010 and ZN2011 option contracts. On August 7, the Shanghai Stock Exchange announced the benchmark prices for the listing of aluminum options and zinc options contracts.

Some analysts believe that the pricing of aluminum and zinc options is more reasonable, the first day of trading strategy, the two options have an advantage in selling rights.

Physical enterprises add hedging tools

Aluminum and zinc are two large-scale non-ferrous metals, which are widely used. Among them, aluminum is widely used in construction and structure, power electronics, transportation, consumer durables, machinery and equipment, packaging and containers and other fields; zinc is widely used in automotive, construction, shipping, battery and other industries. For many years, China is the largest country in the fields of aluminum and zinc production, processing and consumption, with many enterprises, large trade scale and strong risk demand.

With the high-quality development and supply-side structural reform of the non-ferrous metals industry, the demand for refinement and diversification of enterprise risk management is increasing, and the market continues to call for the introduction of options on the basis of aluminum futures and zinc futures.

According to the person in charge of the Shanghai Futures Exchange, after years of development, aluminum futures and zinc futures have formed a certain market scale, contract continuity and liquidity are good, and the investor structure is relatively reasonable. it has become an important risk management tool for China's non-ferrous metals industry, and has played an important role in hedging and avoiding the risk of price fluctuations.

"the timely listing of aluminum options and zinc options is conducive to the function of the futures market, promote the non-ferrous metals industry to form a more reasonable pricing mechanism, and enhance the pricing influence of our country. It is conducive to providing effective and flexible risk management tools for enterprises in the upper and lower reaches of the industrial chain, which is of great significance to the upgrading and optimization of the industrial structure of the non-ferrous metals industry." He said.

Tang Guojing also said that in the risk management application of non-ferrous metals-related enterprises, options can rely on their multi-dimensional risk management characteristics, cooperate with futures, forwards and other derivatives to help enterprises achieve price risk refinement and professional management. For example, on the basis of traditional futures hedging lock price and basis arbitrage, enterprises can timely adopt the reserve call strategy to match a certain proportion of spot inventory, sell virtual call options and collect royalties, so as to optimize inventory costs. receive part of the sales profit in advance, smooth cash flow and ensure the stable operation of the enterprise.

The subject matter of aluminum option and zinc option is aluminum futures contract and zinc futures contract respectively, that is, investors get the underlying futures contract after exercising their rights (performance). For example, the subject matter of the option contract AL2104C12000 is the AL2104 futures contract, and the investor of AL2104C12000 gets the AL2104 futures contract after exercising the right (performing the contract).

With regard to the design of the exercise price of aluminum options and zinc period, the relevant person in charge of the Shanghai Stock Exchange said that the exercise price of aluminum options covers the price range corresponding to the 1.5 times the daily limit of the settlement price of the aluminum futures contract on the previous trading day. The exercise price is less than 10000 yuan / ton, the exercise price spacing is 50 yuan / ton, the exercise price spacing is 10000 yuan / ton, the exercise price spacing is 20000 yuan / ton.

He also said that the exercise price of zinc options covers the price range corresponding to 1.5 times the daily limit of the settlement price of zinc futures contracts on the previous trading day. The exercise price is less than 10000 yuan / ton, the exercise price spacing is 10000 yuan / ton, the exercise price spacing is 25000 yuan / ton, and the exercise price spacing is 10000 yuan / ton.

How to vote on the first day of listing?

According to the listing benchmark price information announced in the last issue, 288 contracts for aluminum options will be listed for trading on August 10, with the listing benchmark price ranging from 1 yuan / ton to 1785 yuan per ton, and zinc options will have 100 contracts listed for trading. the listing benchmark price is in the range of 8 yuan / ton to 2461 yuan / ton.

In this regard, South China Futures options researcher Zhou Xiaoshu analysis, aluminum options listing benchmark volatility reference futures 90-day historical volatility. The underlying 90-day historical volatility of the main contract options is currently 15.39%. The median 90-day historical volatility of aluminum futures is 15.84%, with an average of 14.80%, and the operating range is roughly between 10.46% and 20.56%. At present, the 90-day historical volatility is close to the historical median, and the option pricing is more reasonable.

With regard to zinc options, Zhou Xiaoshu said that the benchmark volatility of the option is based on the 90-day historical volatility of the underlying futures. The 90-day historical volatility of the main futures contract is currently 18.79%. The median 90-day historical volatility of zinc futures is 20.73%, with an average of 20.76%, and the operating range is roughly between 17.73% and 23.59%. At present, although the volatility of zinc is slightly lower than the historical median and average, the implied volatility is often slightly higher than the historical volatility, so the pricing of zinc option is more reasonable.

As far as aluminum fundamentals are concerned, Zhou Xiaoshu believes that macroscopically, the Fed's monetary policy has not turned, the market is full of liquidity, and the Politburo meeting determined that monetary and fiscal policy was slightly tightened, but the overall loose tone remained unchanged to support aluminum prices.

At the same time, she said that in addition to the aluminum enterprises that have been planned to resume and put into production, there is no more news of capacity release this week, but the long-term supply pressure remains; on the cost side, alumina prices are relatively weak, and in the near future, except for a slight rebound in ore prices, there is no more positive, upward force may be insufficient, alumina prices may fall in the short term in the future; aluminum ingots social inventory this week is a small accumulation, mainly due to the inflow of imported goods.

"on the whole, long and short are intertwined, and the recent market is dominated by horizontal shocks." Zhou Xiaoshu said that short-term aluminum futures prices maintain a range of shocks, which range from 14300 yuan / ton to 14800 yuan / ton.

With regard to the first-day investment strategy of aluminum options, Zhou Xiaoshu suggested that investors can build a wide-span selling strategy, sell an AL2010C15000 option contract and sell an AL2010P14000 option contract at the same time.

In terms of zinc fundamentals, Zhou Xiaoshu analyzed from the supply and demand side that the supply of domestic zinc mines was gradually relaxed, and the processing fees for mining and metallurgical negotiations in August rose by about 300 yuan per ton, and with the rebound of zinc prices, the profits of smelters and mines are considerable at present, but some smelters are still under maintenance, and the increment of domestic refined zinc supply is limited in the short term. On the other hand, the import window continues to close, the import inflow is limited, and the removal of zinc ingots has been strong since July. Demand side, the current galvanized plate orders are the main support of the consumer side, relatively stable, alloy and zinc oxide also have signs of warming up, medium-and long-term downstream consumption is more optimistic.

"the current zinc short-term fundamental preference, superimposed by macro and financial factors, zinc prices may remain high." Zhou Xiaoshu believes that short-term zinc prices to maintain high operation, the probability of decline is small, the lower support point is 19100 yuan / ton.

On the investment strategy of aluminum options on the first day of listing, Zhou Xiaoshu said that investors are advised to build a sell imaginary put option strategy, which can sell ZN2010P18600 options contracts.

Hongyuan Futures also issued a view that for the upcoming listing of zinc and aluminum options, there is an advantage in selling rights. First of all, zinc-aluminum options are only listed in the last two consecutive contract months, and it is expected that the active time of futures is also short, which is beneficial for the seller to collect the time value. Secondly, the volatility of aluminum is low all the year round, while the volatility of zinc is slightly higher, but the overall operation of the price is also mild. These characteristics are conducive to put operation.

Warm reminder: gold futures are approaching 2100 US dollars to hit a new high, while silver futures are up more than 5%! For the specific operation, please pay attention to the rapidly changing APP, market, the investment should be cautious, and the operation strategy is for reference only.

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