CME Group to launch offshore RMB options in April

CME Group is set to launch multiple option contracts on its existing US dollar/offshore renminbi (USD/CNH) futures on April 3, the Chicago-headquartered derivatives marketplace announced on Monday.

The move, pending regulatory review, will help clients to manage currency risk amid China's economic recovery, said Paul Houston, global head of FX products at CME Group, stressing that offshore RMB has become a core part of global foreign exchange trading.

The new options contracts will serve as an attractive complement to the over-the-counter market. On one hand, the options provide price discovery and anonymous trading on CME's all-to-all order book. On another, they can block trading for clients who might prefer the OTC-style of trading but stand to benefit from the efficiencies of a centrally cleared product, explained Houston.

The new options contracts will be traded on the Chicago Mercantile Exchange, a subsidiary of CME Group.

Adrian Averre, head of G10 FX flow options at BNP Paribas, considered the new options contracts as "an exciting and timely addition to the CME Group FX option product portfolio", mainly because USD/CNH options have become one of the most traded pairs in the OTC market.

Tim Brooks, head of FX options trading at global market maker Optiver, said that more and more investors are exploring the listed options markets after the sixth and final phase of the Uncleared Margin Rules took effect in September 2022 in the United States and Europe, which require in-scope firms to post and receive initial margin in a manner specifically dictated by the rules.

The USD/CNH options thus provide market participants with a tool for implementing sophisticated hedging and trading strategies around the world's second largest economy, he said.

CME Group is currently the world's largest futures exchange. The group controls the Chicago Mercantile Exchange, New York Mercantile Exchange and Chicago Board of Trade. It is a publicly-traded company with a market capitalization of $66.7 billion.

shijing@chinadaily.com.cn