CME to list new European-Style FX Option Contracts in place of American-Style

CME Group (NASDAQ: CME) announced today that effective Sunday, August 7, 2016 for trade date Monday, August 8, 2016, and pending all relevant CFTC regulatory review periods, CME will list six new European-style Weekly, Monthly, and Quarterly Option.

The European-Style Option Contracts will exercise into the nearest quarterly futures contract on the last trading day of the contract month based upon the 2:00 pm Central Time fix price of the underlying futures contract.

The key difference between American and European options relates to when the options can be exercised:

  • A European option may be exercised only at the expiration date of the option, i.e. at a single pre-defined point in time.
  • An American option on the other hand may be exercised at any time before the expiration date.

The contracts to be listed are as follows:

  1. Australian Dollar/US Dollar (AUD/USD)
  2. British Pound/US Dollar (GBP/USD)
  3. Canadian Dollar/US Dollar (CAD/USD)
  4. Euro/US Dollar (EUR/USD)
  5. Japanese Yen/US Dollar (JPY/USD)
  6. Swiss Franc/US Dollar (CHF/USD)

Concurrent with the initial listing of the European-Style Option Contracts effective Sunday, August 7, 2016 for trade date Monday, August 8, 2016, CME will cease listing additional contract months for the existing American-style Weekly, Monthly, and Quarterly Option Contracts of the same instruments.

The European-Style Option Contracts shall replace the existing American-Style Option Contracts. The last listed contract month of the American-Style Option Contracts will be based upon the June 2017 expiration. CME will permanently delist the American-Style Option Contracts on June 9, 2017.

To view the full notice from CME click here.

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