CME Group Inc. (CME - Free Report) recently unveiled four new palm contracts, which will be added to its suite of agricultural products. These newly introduced contracts will start trading on Jul 11, 2016, upon completion of all relevant regulatory review periods.
The Zacks Rank #4 (Sell) securities exchange provider is the most diverse world leader in the derivates market. CME Group will be able to expand its offerings within the palm derivatives complex with the newly launched contracts. The contracts will not only for trade on CME Globex, but will also be submitted for clearing through CME ClearPort. Notably, these contracts will be listed with and adhere to the rules and regulations of CME Group.
Precisely, these four new contracts are USD Malaysian Crude Palm Oil Calendar futures (CPO), the USD Malaysian Palm Olein Calendar futures (OPF), the USD Malaysian Crude Palm Oil Average Price option (POO), and the Bursa Malaysia Crude Palm Oil-Gasoil Spread futures (POG).
Along with the increased awareness, the company’s clients have displayed genuine interest in utilizing cleared futures for risk management. We believe that these contracts will offer flexibility and efficiency to clients, which in turn, will lead to the effective management of exposure to price volatility in the global palm oil market. CME Group, along with its partners Bursa Malaysia Derivatives (“BMD”) and Thomson Reuters will remain focused on forming a compelling suite of palm products. Hence, market participants will receive assistance with their hedging and trading needs.
BMD’s Crude Palm Oil futures contract (FCPO) will be utilized in the company’s new palm products, thereby acknowledging and strengthening FCPO's position as the global price benchmark. The combination of the new palm products and FCPO will furnish the required risk management tools for the commodity industry, globally.
Since the launch of its suite of Crude Palm Oil Swaps and Palm Olein Swaps in 2013, the company has witnessed the clearing of more than 170,000 contracts or more than 4.25 million metric tons). In May 2016, the company reported a record month-end closing open interest of 17,120, across both products.
CME Group remains committed toward the launch of new products, as well as diversifying derivative product lines. To this end, the company recently launched physically delivered European Union Wheat futures and option. The future contracts would start trading from Sep 12, 2016 and will be listed under the rules and regulations of Chicago Board of Trade (CBOT).
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