The European Climate Exchange has introduced serial options.
They have quarterly settlement dates and will reference March,
June, September and December rather than December
The exchange has tweaked the existing contract to give
investors more choices. "It’s an option with a
twist," said Sara Stahl, director of market development at ECX
in London. "We had yearly contracts, but didn’t
think it was sufficient."
For example, those wishing to hedge the December expiry
contract in January would have to pay an expensive premium and
would have to bear the capital cost for 11 months.
ICE Futures, which clears ECX’s products, did
not list serial options before. Such contracts are more common
in fixed income derivatives but not so much in commodities.
The ECX expects about 90% of volume in these contracts to
come from brokerages.
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