CME Group announces weekly options for Gold, Silver, and Copper expiring every day
These options are increasingly used for hedging against immediate exposures linked to major economic indicators like the Consumer Price Index (CPI), Federal Reserve meetings, and unemployment reports. The introduction of daily expiries throughout the trading week offers clients heightened flexibility. This change allows for more precise portfolio tuning and better management of macroeconomic risks.
CME Group, a leading derivatives marketplace, plans to enhance its metals options offerings. The company intends to introduce Tuesday and Thursday expiries for Gold, Silver, and Copper options.
These additions, pending regulatory approval, aim to start trading on January 22, 2024. This expansion will enable option expiries every business day, from Monday to Friday.
Manage macroeconomic risk as it unfolds
Jin Hennig, Managing Director and Global Head of Metals at CME Group, noted the growing preference among clients for weekly options.
“Increasingly, our clients are turning to our suite of weekly options to hedge their immediate exposure around the release of key economic indicators, including CPI, Fed meetings and unemployment reports.
“With an expiration now available on every day of the trading week, clients have maximum flexibility to fine tune their portfolios with precision and manage macroeconomic risk as it unfolds.”
Earlier, in May 2023, CME Group launched Monday and Wednesday expiries for Weekly Gold, Silver, and Copper options. The performance of these contracts has been noteworthy. For example, a single-day volume record saw 49,000 Gold Weekly options traded on December 4. Additionally, there has been significant growth in average daily volume (ADV) for these options. Copper Weekly options ADV surged by 270% year-to-date, and Silver Weekly options ADV grew by 77% in the same period. Notably, 25% of the trading volume for these options now takes place outside U.S. trading hours.
Gold, Silver, and Copper Weekly options are listed by and subject to the rules of COMEX. For more information on these weekly options, CME Group encourages interested parties to visit their website.
CME Group debuted Micro Henry Hub futures and options
Last month, CME Group debuted Micro Henry Hub futures and options. These micro contracts are designed to offer enhanced flexibility to global energy traders in managing their natural gas exposure with precision.
The new contracts will be just one-tenth the size of CME Group’s flagship Henry Hub futures and options, providing a more accessible entry point for investors.
The introduction of Micro Henry Hub futures and options aligns with CME Group’s commitment to delivering cost-effective and accessible trading solutions. These smaller-sized contracts offer clients a more flexible and cost-effective way to engage in benchmark energy futures trading.
CME Group has witnessed consistent growth in trading activity related to the full-sized Henry Hub futures contract. The average daily volume in this contract has risen by 14% compared to the previous year. Furthermore, trading volume originating outside the United States has grown by 3% this year, accounting for 21% of total volume. Average open interest has also experienced substantial growth, increasing by 16% compared to the previous year.
CME Group continues to maintain its position as the most liquid and efficient marketplace for trading natural gas options. Henry Hub options have seen a remarkable surge, with average daily volume up by 29% from the previous year. Impressively, 55% of this year’s volume has occurred on-screen, marking a 10% increase from the previous year. Average open interest in Henry Hub options has also risen by 12% compared to the previous year.
