SMM News: August 10, the Shanghai Futures Exchange (hereinafter referred to as the Shanghai Futures Exchange) for the first time listed two types of options-aluminum options and zinc options. Since listing for a month, the overall operation of the aluminum option and zinc option market is stable, the trading position scale is steadily expanding, the investor structure is becoming more and more perfect, and the market function is initially emerging.
As of September 9, 2020, aluminum options and zinc options have been operating for a total of 23 trading days. Aluminum options trading was stable, and the size of the trading position expanded steadily, with a cumulative trading volume of 65600 lots, a cumulative turnover of 52.2143 million yuan, and an after-hours position of 12800 lots on the 9th. Among them, the average daily trading volume of aluminum options accounted for 1.38% of the average daily trading volume of the underlying futures in the same period, and 4.18% of the futures positions in the after-hours aluminum period on the 9th. Zinc options trading is more active, the size of the transaction position expanded rapidly, with a cumulative turnover of 138900 lots, a cumulative turnover of 199.1057 million yuan, and an after-hours position of 12300 lots on the 9th. Among them, the average daily trading volume of zinc options accounted for 2.07% of the average daily trading volume of the underlying futures in the same period, and the zinc option position accounted for 6.03% of the underlying futures position after the 9th session.
Li Guangfei, deputy general manager of Chinalco International Trading Group Co., Ltd., said that according to the operation of the first month, the pricing of aluminum options closely follows the changes in the underlying aluminum futures prices, and the implied volatility of equal value options is mainly in the range of 15%, 20%. Close to historical volatility, pricing is more reasonable. Compared with the underlying futures, the trading of aluminum options is stable, and the position ratio increases steadily. As a more three-dimensional risk management tool, aluminum option has been gradually accepted by market participants.
Li Renjun, general manager of the derivatives investment department of Minmetals Industry Financial Services (Shenzhen) Co., Ltd., said that since the listing of aluminum options and zinc options, the transaction prices are reasonable, and the positions of aluminum and zinc two metal commodity options have increased steadily. Less than a month has exceeded the unilateral position level of more than 10, 000 hands; from the trading volume, the turnover of zinc options is as high as 17000, with good liquidity. With the increase of trading positions, the functions of the two options are expected to be brought into full play in the future.
The smooth operation of aluminum options and zinc options is inseparable from the quotation services provided by market makers for the market. It is understood that there are 9 market makers for aluminum options and 10 market makers for zinc options, all of which actively participated in market-making in the first month, promoting the narrowing of market spreads and ensuring the provision of liquidity. Cai Chengmiao, head of the market-making business of CITIC Securities Co., Ltd., said that since the introduction of aluminum and zinc options in the last issue on August 10, trading has become increasingly active, volatility pricing has gradually been reasonable, price spreads have gradually narrowed, and liquidity has been significantly improved. it is becoming more and more attractive to market participants. Volatility, has been constantly tested by the listing, gradually stabilized at a reasonable level, and follow the futures to achieve the corresponding rise and fall of volatility. At the same time, with the efforts of market makers, the option spread has gradually narrowed, and the par option contract spread has gradually shrunk from dozens of yuan when it was first listed to more than ten yuan or even a few yuan now. for market participants, transaction costs have been significantly reduced, enhancing the attractiveness of the market to cost-sensitive customers.
The relevant person in charge of the last stock exchange said that in the next stage, according to market feedback, the contract rules of aluminum options and zinc options will be optimized and improved in time, and on the basis of early market cultivation, training and marketing activities will be carried out for different types of customers to promote the steady development of the aluminum options and zinc options market.
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