European Climate Exchange to launch options October 13

European Climate Exchange to launch options October 13

London (Platts)--25Sep2006

The European Climate Exchange (ECX) and ICE Futures Monday announced
that they will launch an options contract for EU emissions Allowances on
October 13.
The contract, which will be called the ECX CFI Option, is still
awaiting regulatory aproval. The ECX CFI Options will be listed and admitted
to trading on ICE Futures' electronic trading platform. All trades will be
cleared by LCH.Clearnet.
ECX and ICE Futures aim to consolidate their position as emissions
market of choice and have reaffirmed their leading position by being the first
exchange to launch traded options for the EU Emissions Trading Scheme.
Subject to the ICE Futures Regulations, market participants will also
be able to use the Exchange for Swap (EFS) mechanism, to register OTC options
contracts for clearing by LCH.Clearnet.
Peter Koster, chief executive of ECX commented: "We are very pleased
to offer ECX's new options contract as an important addition to our futures
contract. The growing demand for options shows that the market is ready for
the next step."
According to a statement from ECX, the new contract will list 26
strike prices at Eur1.00 intervals between Eur5.00-30.00
The exchange will charge a Eur2.00 per lot fee per side for exchange
members' proprietary business, and Eur2.50 per lot for all other trades. Each
lot represents 1,000 EU emissions Allowances.
Options will be listed for the front two contract months, plus the
next three December contracts. Thus, on October 13 the exchange will list
options for October 2006, November 2006, December 2007, December 2008 and
December 2009.
Options contracts will expire three business days before the expiry of
the relevant ICE Futures ECX CFI Futures Contract month.
Options contracts will be exercised into ECX CFI futures contracts and
are of European-style exercise, such that at expiry automatic exercise will
occur of options which are one or more ticks in the money.

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