CME Group to Launch Four New ‎Palm Contracts in July

Chicago-based CME (NASDAQ:CME), one of the world’s paramount exchange operators, has partnered with Bursa Malaysia Derivatives and ‎Thomson Reuters to extend its suite of agricultural products by adding four new ‎palm contracts, according to a CME statement.‎

‎The new contracts broaden CME Group's offerings within the palm derivatives complex, and will be available for trading on CME Globex, for submission for clearing through CME ‎ClearPort, and should begin trading on July 11, 2016, pending all relevant regulatory review ‎periods. Together with the Crude Palm Oil Futures contract (FCPO), the four products will provide ‎necessary hedging and Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term tools for the global commodity industry. ‎

The holding company for CBOT, NYMEX, and COMEX exchanges launched its suite of crude palm oil ‎swaps and palm olein swaps back in 2013. Since then, more than 170,000 contracts have been ‎cleared, with record month-end closing open interest of 17,120 in May 2016 across both ‎products.‎

According to the CME announcement, the four new contracts will include the 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).

Reference Venues ‎

Concerning the reference prices, the Malaysian Palm Olein Calendar futures contract will be ‎based on prices from the Thomson Reuters daily palm reference price for the palm oil ‎complex, while the new Malaysian Crude Palm Oil Calendar futures contract will reference ‎Bursa Malaysia Derivatives' Crude Palm Oil futures contract prices.‎

The new average price option contract will be cash-settled to the average daily settlement ‎price of CPO futures, while the Bursa Malaysia Crude Palm Oil-Gasoil Spread futures contract ‎will reflect the settlements of the CPO futures and the ICE Gasoil Calendar futures.‎

Commenting in the press release, Nelson Low, Executive Director of Agricultural ‎Products at CME Group, said: "Our customers have shown increased awareness of, and interest ‎in using cleared futures on top of their traditional OTC positions in managing their risks, and ‎these four new contracts will provide them the flexibility and efficiency to manage exposure to ‎price Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad Read this Term in the global palm oil market." ‎

‎"The use of BMD's Crude Palm Oil futures contract (FCPO) in CME Group's new palm ‎products recognises and reinforces FCPO's position as the global price benchmark," said K ‎Sree Kumar, the Acting Chief Executive Officer of Bursa Malaysia Derivatives Berhad.