In June last year, as my country's first options contract open to the outside world, palm oil options were officially listed on the Dalian Commodity Exchange and simultaneously introduced foreign traders to participate in the transaction. It has been one year since the listing. Gradually expanded, the option function initially appeared.
According to statistics, as of the end of June 2022, the cumulative trading volume of palm oil options was 22.33 million lots, with a cumulative turnover of 34.51 billion yuan and an average daily open interest of 156,000 lots.The cumulative trading volume and average daily open interest of palm oil options accounted for 9.0% and 24.8% of the underlying futures, respectively.Especially since the beginning of this year, under the circumstance that the spot price fluctuates greatly and the demand for industrial risk management increases, the scale of palm oil options trading positions has increased significantly, and the trading volume has jumped to the fourth place in the global agricultural options; Since the listing of options, unit clients have actively participated, and the number of unit clients participating in the transaction has steadily increased. As of the end of June, unit client positions in palm oil options accounted for 61.3%.
Shi Hengyu, chief analyst of oils and oils from the China-Thailand Futures Research Institute, said that since the listing of palm oil options, with the steady increase in market size and liquidity, the changes in implied volatility are also in line with reality, which better reflects the market's interest in palm oil futures spot prices. Anticipation of volatility.For example, when the futures spot market is relatively stable, the implied volatility of options is about 26%. When the current spot price fluctuates relatively violently, the implied volatility will respond immediately, reaching a maximum of 60%, which guarantees option hedging. function effectively.
According to the reporter's understanding, palm oil is currently the largest vegetable oil variety in the world in terms of production, consumption and international trade. my country's palm oil consumption is completely dependent on imports. It is the second largest importer of palm oil in the world, and palm oil has become the second largest importer of palm oil in the world. It is the second largest vegetable oil consumption variety in my country based on soybean oil.Against the background of the sharp fluctuations in oil prices since last year, the hedging function of palm oil options has been effectively brought into play, providing industrial enterprises with more refined and personalized risk management tools.
Market participants pointed out that in the past two years, due to the continuous relatively low inventory of palm oil in Southeast Asia, my country's palm oil import profits have always been in a state of sharp upside down. Therefore, it is impossible to effectively lock in domestic futures hedging while purchasing spot goods overseas. Profits, and the mode of buying futures in advance to lock in the cost of import procurement also faces the risk of constant price changes.Some companies try to use forward call options or a combination of call options to lock in procurement costs in advance when the volatility level is low, which not only avoids the risk of rising procurement costs, but also controls the market risk when the market changes to a low range. .
After the listing of palm oil options, related companies have begun to transform from the original model of using a single futures tool to building a combination of futures and options for risk management.In particular, entities with low risk tolerance can use the option "insurance" function to avoid the pressure of margin calls when the market is unfavorable.
Fangshun United (Ningbo) Supply Chain Co., Ltd. is a trading enterprise mainly engaged in palm oil basis trading. The trading varieties are mainly 24 degrees palm oil. The business area covers South China, East China and North China. The average monthly trade volume is about 5000 tons.Zou Hailong, head of the company's business, told reporters that palm oil options more flexibly meet the risk management needs of enterprises at different stages. In the current situation where basis trading in the spot market is extremely mature, by combining basis trading with option tools, it is possible to Effectively reduce the risk of price fluctuations between trading parties during the price point period.
"Palm oil options help to promote the further development of the rights-containing trade model in the oil and fat industry, provide more opportunities for companies to 'stabilize prices' and promote mutual benefit and win-win for the upstream and downstream of the industrial chain." Zou Hailong said.
The relevant person in charge of DCE said that in the next step, DCE will steadily promote the listing of more oil and oil options varieties based on the demand in the spot market, and continue to optimize the options contract rules to promote the effective functioning of options.At the same time, DCE will continue to cultivate the options market, expand the scope of participants in the commodity options market, consolidate the customer base of new options options, and promote the sustainable and healthy development of the options market.
