(A pdf version of Ch. 11A is at the bottom of the page)

11A00.              SCOPE OF CHAPTER

This chapter is limited in application to put and call options on Soybean futures contracts. In addition to the rules of this chapter, transactions in options on Soybean futures shall be subject to the general rules of the Exchange insofar as applicable.

11A01.              OPTIONS CHARACTERISTICS 

11A01.A.           Contract Months

Trading may be conducted in the nearby Soybean futures options contract month and any succeeding months, provided however, that the Exchange may determine not to list a contract month. For options that are traded in months in which Soybean futures are not traded, the underlying futures contract is the next futures contract that is nearest to the expiration of the option. For example, the underlying futures contract for the February option contract is the March futures contract.

11A01.B.           Trading Unit

One 5,000 bushel Soybean futures contract of a specified contract month.

11A01.C.           Minimum Fluctuations

The premium for Soybean futures options shall be in multiples of one‑eighth (1/8) of one cent per bushel of a 5,000 bushel Soybean futures contract which shall equal $6.25 per contract.

However, a position may be initiated or liquidated in Soybean futures options at a premium ranging from $1.00 to $6.00, in $1.00 increments per option contract.

11A01.D.           Trading Hours

The hours of trading for options on Soybean futures contracts shall be determined by the Exchange. Soybean futures options shall be opened and closed for all months and strike prices simultaneously.

On the last day of trading in an expiring option, the expiring Soybean futures options shall be closed with a public call, made strike price by strike price, immediately following the close of the open outcry trading session for the corresponding Soybean futures contract.  

11A01.E.           Exercise Prices

Trading shall be conducted for put and call options with striking prices in integral multiples of ten (10) cents and twenty (20) cents per bushel per Soybean futures contract as follows:

1.        

a.       At the commencement of trading for any option contract, the Exchange shall list a strike closest to the previous day's settlement price of the underlying Soybean futures contract (the at-the-money strike), and strikes in integral multiples of twenty cents in a range of 50 percent above and below the at-the-money strike. If the previous day's settlement price is midway between two strikes, the at-the-money strike shall be the larger of the two.

b.       Over time, new twenty cent strikes will be added to ensure that all strikes within 50 percent of the previous day's settlement price in the underlying futures contract are listed.

2.        

a.       At the commencement of trading for options that are traded in months in which Soybean futures are not traded, and for standard option months the business day they become the second listed month, the Exchange shall list a strike closest to the previous day's settlement price of the underlying Soybean futures contract (the at-the-money strike), and in integral multiples of ten cents in a range 25 percent above and below the at-the-money strike. If the previous day’s settlement price is midway between two strikes, the at-the-money strike shall be the larger of the two. For example, ten-cent strike price intervals for the September contract would be added on the first business day after the expiration of the July options contract.

b.       Over time, new ten-cent strike prices will be added to ensure that all strikes within 25 percent of the previous day's settlement price in the underlying futures are listed.

3.       All strikes will be listed prior to the opening of trading on the following business day. The Exchange may modify the procedures for the introduction of strikes as it deems appropriate in order to respond to market conditions. The Exchange will not generally consider new strike prices beyond the strike bands described above.

11A01.F.    Position Limits

 In accordance with Rule 559, Position Limits and Exemptions, no person shall own or control positions in excess of:

1.                   600 futures contracts net long or net short in the spot month. 

2.                   6,500 futures-equivalent contracts net long or net short in any single contract month excluding the spot month. Additional futures contracts may be held outside of the spot month as part of futures/futures spreads within a crop year provided that the total of such positions, when combined with outright positions, does not exceed the all months combined limit.

3.                   10,000 futures-equivalent contracts net long or net short in all months combined.

Refer to Rule 559. for requirements concerning the aggregation of positions and allowable exemptions from the specified position limits. 

11A01.G.    Reserved

11A01.H.     Nature of Options on Soybean Futures

The buyer of one Soybean futures put option may exercise his option at any time prior to expiration (subject to Regulation 11A02.A.), to assume a short position of one Soybean  futures contract of a specified contract month at a striking price set at the time the option was purchased. The seller of one Soybean futures put option incurs the obligation of assuming a long position in one Soybean futures contract of a specified contract month at a striking price set at the time the option was sold, upon exercise by a put option buyer.

The buyer of one Soybean futures call option may exercise his option at any time prior to expiration (subject to Rule 11A02.A.), to assume a long position of one Soybean futures contract of a specified contract month at a striking price set at the time the option was purchased. The seller of one Soybean futures call option incurs the obligation of assuming a short position in one Soybean futures contract of a specified contract month at a striking price set at the time the option was sold, upon exercise by a call option buyer. 

11A01.I.      Termination of Trading

Subject to the provisions of Rule 11A01.D., no trades in Soybean futures options expiring in the current month shall be made after the close of the open outcry trading session for the corresponding Soybean futures contract on the last Friday which precedes by at least two business days, the last business day of the month preceding the option month. If such Friday is not a business day, the last day of trading shall be the business day prior to such Friday.

 11A01.J.     Contract Modification

Specifications shall be fixed as of the first day of trading of a contract except that all options must conform to government regulations in force at the time of exercise. If the U.S. government, an agency, or duly constituted body thereof issues an order, ruling, directive, or law inconsistent with these rules, such order, ruling, directive, or law shall be construed to become part of the rules and all open and new options contracts shall be subject to such government orders.

11A02.        EXERCISE AND ASSIGNMENT

In addition to the applicable procedures and requirements of Chapter 7, the following shall apply to the exercise and assignment of Soybean Options.

11A02.A.     Exercise of Option

The buyer of a Soybean futures option may exercise the option on any business day prior to expiration by giving notice of exercise to the Clearing House by 6:00 p.m., or by  such other time designated by the Exchange, on such day.

After the close on the last day of trading, all in-the-money options shall be automatically exercised, unless notice to cancel automatic exercise is given to the Clearing House. Notice to cancel automatic exercise shall be given to the Clearing House by 6:00 p.m., or by such other time designated by the Exchange, on the last day of trading.

Unexercised Soybean futures options shall expire at 7:00 p.m. on the last day of trading.

11A02.B.     Assignment

Exercise notices accepted by the Clearing House shall be assigned through a process of random selection to clearing members’ open short positions in the same series. A clearing member to which an exercise notice is assigned shall be notified thereof as soon as practicable after such notice is assigned by the Clearing House.

The clearing member assigned an exercise notice shall be assigned a short position in the underlying futures contract if a call is exercised or a long position if a put is exercised. The clearing member representing the option buyer shall be assigned a long position in the underlying futures contract if a call is exercised and a short position if a put is exercised.

All such futures positions shall be assigned at a price equal to the exercise price of the option and shall be marked to market in accordance with Rule 814. on the trading day of acceptance by the Clearing House of the Exercise Notice.

 11A03.        ACTS OF GOVERNMENT, ACTS OF GOD AND OTHER EMERGENCIES

(Refer to Rule 701.).

 11A04.        CORRECTIONS TO OPTIONS EXERCISES

 Corrections to option exercises, including automatic exercises, may be accepted by the Clearing House after the 6:00 p.m. deadline and up to the beginning of final option expiration processing provided that such corrections are necessary due to: (1) a bona fide clerical error, (2) an un-reconciled Exchange option transaction(s), or (3) an extraordinary circumstance where the clearing firm and customer are unable to communicate final option exercise instructions prior to the deadline. The decision as to whether a correction is acceptable will be made by the President of the Clearing House, or the President’s designee, and such decision will be final.

 11A05.        OPTIONS PREMIUM LIMITS

 Trading is prohibited during any day except for the last day of trading in a Soybean futures option at a premium of more than the trading limit for the Soybean futures contract above and below the previous day's settlement premium for that option.  

 11A06.        PAYMENT OF OPTION PREMIUM

The option premium must be paid in full by each clearing member to the Clearing House and by each option customer to his futures commission merchant at the time that the option is purchased, or within a reasonable time after the option is purchased.