Affected by the epidemic this year, under the background that macroeconomic operations and industrial economic operations are facing multiple pressures, the function of my country’s futures market in serving the real economy has been further highlighted, effectively assisting the recovery and development of the real economy.
The reporter recently learned from the Zhengzhou Commodity Exchange (hereinafter referred to as “Zhengzhou Commodity Exchange”) that the three Since the beginning of the quarter, especially since October, the options market has grown rapidly, with PTA options performing outstandingly.
“Currently, Zhengzhou Commodity Exchange has listed 6 options including PTA options and cotton options. With the increase in the supply of options in the options market, we have systematically and Comprehensive options market cultivation activities have formed a ‘multi-point blooming’ options market pattern, effectively serving the development of the real economy.” said the relevant person in charge of Zhengzhou Commodity Exchange.
Option holdings exceeded one million
PTA options performed outstandingly
Currently, my country’s textile industry chain already has a series of “combination tools” including PTA futures, PTA options, short fiber futures, and cotton futures, cotton options and cotton yarn futures.
On December 16, 2019, PTA options were listed on the Zhengzhou Commercial Exchange. They were one of the first listed energy options in my country.
An option refers to a contract. This contract gives the holder the right to buy or sell an asset at a fixed price on or at any time before that date. It is a basic risk management tool. The characteristics and advantages of options include: avoiding risks while taking into account returns; no insurance call pressure and easy to hold; diversified “insurance prices” and personalized portfolio strategies.
Industry analysts pointed out that options are not the icing on the cake of futures, but keep pace with futures. Buying an option is equivalent to buying insurance, the premium is called the premium, and the guaranteed price is called the exercise price.
The reporter learned from the Zhengzhou Commercial Exchange that in the third quarter of this year, the average daily trading volume of options on the Zhengzhou Commercial Exchange was 164,700 lots (unilateral, the same below), with a month-on-month increase of 61.04%. , the average daily position was 632,800 lots, a month-on-month increase of 12.14%. Since October, the size of the options market has been growing rapidly, with open positions exceeding one million, setting a record high.
Among them, PTA options have outstanding performance. In October, the average daily trading volume of PTA options (as of October 28) reached 122,300 lots, and the average daily position reached 330,200 lots, an increase of 217.23% and 100.92% respectively compared with the third quarter.
The reporter also learned that in recent years, in order to do a good job in nurturing the options market and improve the professionalism and accuracy of the training content in the options market, Zhengzhou Commodity Co., Ltd. has based itself on improving the quality of training. At this point, try to formulate a standardized “lecturer’s teaching syllabus” and make clear requirements for the key points and methods of lecturers’ teaching content. Through market practice and feedback, the application of the syllabus further enhances the orderliness and directionality of the teaching content, and at the same time provides an intuitive and clear “learning list” for option learners. ZCE also conducts “series of theme” options video lecture training on a monthly basis.
In addition, Zhengzhou Commodity Exchange continues to deepen practical training, and carries out activities such as “Options Workshop” to enter the “Industrial Base” and “Options Workshop” to send options to enterprises, focusing on industrial enterprises. , provide them with empowering training on options business knowledge and teaching skills, and invite company representatives to give on-site trial lectures, encouraging companies to not only “be able to do” but also “be able to speak”.
A person in charge of a polyester company told reporters that the “serial” video lectures carried out by Zhengzhou Commercial Institute cover a wide range of topics, from basic to advanced, from theory to practical operation, and progress step by step. , comprehensive and specific, providing enterprises with an opportunity to systematically and efficiently learn options knowledge and improve their trading capabilities.
“At present, while the scale of the entire commodity options market is steadily expanding, investor participation is also increasing in an orderly manner. As of October 28 this year, Zhengzhou Commodity Exchange Commodity Options The number of opened accounts has exceeded 200,000, and the cumulative number of participating accounts has exceeded 30,000.” said the above-mentioned person in charge of Zhengzhou Commodity Exchange.
According to relevant data, in the third quarter of this year, the cumulative trading volume of all ZCE options exceeded 1 million lots. Judging from the proportion of the total market volume, the scale of the options market of Zhengzhou Commodity Exchange has shown a balanced development trend.
Enterprises’ “option awareness” has increased
The application of strategies has become increasingly flexible and diverse
Currently, as large-scale private chemical fiber companies enter refining and chemical projects and continue to promote the development of “deep integration”, market competition is becoming increasingly fierce. Enterprises in the polyester industry chain need to learn more complete financial knowledge and master more financial tools to better protect the operation of the enterprise.
Especially in the context of this year’s epidemic that has had a serious impact on the operation of the industrial market and faced with high PTA inventories, industrial companies have become more aware of the important value of effective use of financial tools.
“In the process of using futures instruments for hedging, enterprises will occupy a certain amount of margin. Especially when prices fluctuate significantly, more margin will be occupied. But if it can By effectively using options, the option margin can offset the futures margin, which will reduce the price management costs of spot companies to a certain extent. At the same time, PTA options can provide participating companies with a time dimension and spatial price for price prediction. range, so that enterprises can combine their own actual conditionsUnder the circumstances, some better operations can be performed within a relatively safe range. “A relevant person in charge of a polyester company said.
In terms of how to use financial tools more effectively, many companies are currently studying strategies that are more suitable for the company’s actual situation. Some leading companies Enterprises no longer focus on the two “single-leg strategies” of “call option hedging to avoid risks” and “put option hedging to enhance returns”. Instead, they use option strategies more diversifiedly and gradually begin to explore the use of covered coverage. , straddle, wide straddle or spread strategies to carry out risk management to better meet the individual needs of enterprises for their own hedging.
Ningbo Hengyi Industrial Co., Ltd. Options Responsible Renguan Jiangnan said that with the recent high PTA inventory, the company pre-judged the market and sold call options while buying put options, forming a collar strategy for short-term hedging. At the same time, the company also adopted “double selling” strategy, selling a straddle or wide straddle combination. “If the price falls, the put option sold will be exercised, which is equivalent to purchasing spot goods at a low price; if the price rises, the call option will be exercised, which is equivalent to a high price Futures were sold. “Guan Jiangnan said that by using option tools, corporate hedging methods are more flexible and more in line with the company’s business model, thereby achieving the purpose of dynamically adjusting the spot hedging ratio, and the cost advantage of hedging is more obvious.
The relevant person in charge of a PTA trading company said: “The flexible use of option tools is like putting on a layer of ‘protective clothing’ for the company’s operations. When the PTA futures price is not ideal, the company forms a covered opening strategy by selling an equal number of shallow out-of-the-money call options; when the PTA futures price reaches expectations, the company promptly closes the option position. Making good use of options can bring a rich and varied strategy portfolio to the company, making up for the shortcomings of a single futures strategy. Through the combined use of futures and options instruments, the company has further improved the hedging effect and effectively promoted the linkage of futures and spot markets. ”
However, it should be noted that how industrial companies can better use options and make options truly become the “protective clothing” for corporate risk management requires continuous learning.
“The management and application of commodity options are highly professional. The cultivation of options market is a long-term and continuous work, and it is also one of the key factors affecting market development. In the next stage, we will continue to enrich and expand the service model of derivatives instruments, strengthen the supply of new options, and continuously improve the derivatives system. At the same time, we will draw on the strength of all parties to continue to explore the difficulties and pain points in the process of investors participating in options, and rely on a “deep cultivation” approach to carry out options market cultivation work to further deepen the market and promote high-quality development of the options market. “The above-mentioned person in charge of Zhengzhou Commercial Exchange said.
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