Singapore Exchange (SGX) launched Monday its new OTC options suite for SGX Iron Ore and SGX Forward Freight Agreements (FFA).
The SGX OTC options complement the SGX iron ore and FFA product suite and provide customers with a comprehensive suite of instruments for hedging, trading, and credit risk mitigation.
With this new suite, SGX customers are now able to efficiently clear their portfolio of commodities swaps and options with a single clearing house, and enjoy the benefit of margin offsets between options and the underlying swaps, SGX said.
The local bourse added that all option trades cleared from September 10 to October 31 will receive a 100 per cent clearing fee rebate. Active iron ore options customers who clear at least 500 lots of options during the same period will also receive fee rebates on their underlying iron ore swaps, SGX further said.
Iron Ore swaps clearing on the SGX accounted for over 90 per cent of all volume. A record monthly high was set in August of 14.88 million metric tonnes, and an all-time high was also set for month-end open interest of 9.18 million metric tonnes.