Chicago-based CME, the world’s largest derivatives exchange, is set to launch its U.S. dollar based palm oil contract in May as global demand for the tropical oil heats up.
Here are some contract specifications for the dollar based palm oil futures:
- Trading unit: One unit of 25 metric tons
- Underlying Instrument: Bursa Malaysia Derivatives Berhad
Crude Palm Oil futures (FCPO)
- Price Basis: U.S. dollars and cents per metric ton
- Tick Size: $0.25 per metric ton ($6.25 per contract) Trading Hours (CST or U.S. Central Standard Time): CME Globex: Sunday at 5:00 p.m. through Friday at 4:00 p.m. with daily trading halts from 4:00 p.m.-5:00 p.m. Daily Price Limits:
There shall be no trading in dollar cash-settled crude palm oil futures at a price more than 10 percent above or below the previous day’s settlement price, unless the FCPO contract is trading at expanded limits. If this were to be the case, the U.S. Dollar Cash-Settled Crude Palm Oil contract would trade at the expanded limits. Contract Months:
Monthly referencing Bursa Malaysia (BMYS.KL) palm oil futures’ second through the fifth consecutive forward months, skipping the spot and first forward month. Thereafter, alternate months up to 24 months.
For the May 24 launch, the Aug. 2010, Sept. 2010, Oct. 2010, Nov. 2010, Jan. 2011, March 2011, May 2011, July 2011, Sept 2011, Nov 2011, Jan 2012 and March 12 contracts will be available for trading. Last Trading Day:
Noon on the 15th business day two months prior to becoming the delivery month. For example, the December 2010 contract would expire at noon Chicago time on October 15, 2010. If the 15th is a nonmarket day, the contract will settle on the preceding business day. Cash Settlement Price:
Final settlement will be cash settled based on the average price of the corresponding FCPO contract during the last five trading days two months prior to becoming the delivery month. The settlement price will be converted to USD and rounded to the nearest $0.25 using the using the Association of Banks in Singapore’s 11:00 a.m. Singapore time MYR spot price. Spec. Position Limits:
Five hundred contracts net long or net short for the spot month. 1,000 contacts for any single contract month except for the spot month. 1,000 contracts for all contract months combined. (Source: CME Group) (Compiled by Niluksi Koswanage; Editing by Ed Lane)
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