CME Group Tuesday introduced three new options on the recently-acquired KCBT hard red winter Wheat futures contracts.
KCBT Weekly Wheat Options, KCBT-CBOT Wheat Spread Options and MGEX-KCBT Wheat Spread Options will be available for trading on July 1, pending CFTC review.
KCBT Weekly Wheat Options will provide HRW wheat customers with a tool for managing event risk, such as weather and USDA reports. These options will be available for trading on the Chicago trading floor and CME Globex, and will be listed with and subject to the rules and regulations of KCBT.
Weekly options on CBOT corn, wheat and soybean futures were previously introduced in June of 2011.
Additionally, KCBT-CBOT Wheat Spread Options and MGEX-KCBT Wheat Spread Options will be available for trading on the Chicago trading floor and CME Globex, and will be listed with and subject to the rules and regulations of CBOT and KCBT respectively.
These two new inter-market spread options, and the existing MGEX-CBOT Wheat Spread Options, will enable agricultural participants to manage the risk associated with the price differentials inherent between the hard red spring, soft red winter and HRW varieties of wheat.
"Since our acquisition of the KCBT late last year, we've taken a number of steps to grow the existing KCBT futures and options contracts," says Tim Andriesen, CME Group managing director of agricultural commodities and alternative investments. "We also committed to develop new and innovative options on KCBT wheat futures to provide additional trading and spreading opportunities for our wheat customers."
"The introduction of these new products expands our options offering and will benefit customers of both varieties of wheat, while further solidifying our role as the leading marketplace for the trading of deep and liquid wheat benchmarks," Andriesen says.
KCBT Wheat futures and options will transition to the CME Group Chicago trading floor on July 1, when they will begin trading alongside CBOT soft red winter wheat futures and options.