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CME Group to launch offshore Renminbi options amid growing popularity of USD/CNH

Rick Steves

“Our options contracts will offer an attractive complement to the OTC market, with price discovery and anonymous trading on our all-to-all order book, as well as block trading for clients who might prefer the OTC-style of trading but stand to benefit from the efficiencies of a centrally cleared product.”

CME Group has announced that it will launch options on its existing U.S. Dollar / Offshore Chinese Renminbi (USD/CNH) futures on April 3, pending regulatory review.

As a result of the Uncleared Margin Rules (UMR), more and more investors are exploring the listed options markets. USD/CNH options have already become one of the most traded pairs in the OTC market.

CME Group’s USD/CNH will serve as an alternative to the OTC market for those like OTC-style but want the benefits of a centrally cleared product.

Offshore Renminbi has become a core part of global FX trading

Paul Houston, Global Head of FX Products, CME Group, commented: “Offshore Renminbi has become a core part of global FX trading and we’re delighted to offer these options contracts to help clients manage currency risk as China resets its economy during this period of reopening.

“Our options contracts will offer an attractive complement to the OTC market, with price discovery and anonymous trading on our all-to-all order book, as well as block trading for clients who might prefer the OTC-style of trading but stand to benefit from the efficiencies of a centrally cleared product.”

Adrian Averre, Head of G10 FX Flow Options at BNP Paribas, stated: “This is an exciting and timely addition to the CME Group FX option product portfolio as USD/CNH options have become one of the most traded pairs in the OTC market. We look forward to being an active liquidity provider in the CME Group market.”

Tim Brooks, Head of FX Options Trading at Optiver, said: “USD/CNH options provide market participants with a powerful tool for implementing sophisticated hedging and trading strategies around the world’s second largest economy.

“As a result of the Uncleared Margin Rules (UMR), more and more investors are exploring the listed options markets. By providing liquidity in USD/CNH products from launch, we look forward to enhancing the ability of market participants to seize opportunities and manage their risk with confidence.”

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