Tuesday, May 19, 2009

The Debts of the Spenders: CBOT Expands Trading For Grains, Soy

Now traders can buy LEAPs further out.

CBOT To Allow Traders To Trade Farther Out In Grains, Soy

Starting next month, traders will be able to take positions farther out in Chicago
Board of Trade grain and oilseed futures than previously allowed, the exchange said

The CME Group Inc. (CME), which owns the CBOT, said it planned to expand
its wheat, corn, soybean, soyoil and soymeal futures cycle guides, which determine
when contract expirations are authorized for trading. The expanded cycles take
effect June 8.

The exchange said it will update its grain and oilseed cycle guides by “filling in
gaps in the cycle.” It will add one additional new crop expiration and its preceding
July expiration for corn and soybeans and its preceding October and July expirations
for soyoil and soymeal. In CBOT corn, for example, traders will be able to trade out
as far as December 2012, as opposed to the current limit of December 2011.

The cycle guides have not been expanded since January 2003, according to the
CME. The expansions are warranted because trading volume and open interest have
grown “significantly” since then, the exchange said.

“Larger overall markets and higher volatility are causing demand for additional
futures expirations not covered in the existing cycle guides,” the exchange said in a
notice distributed on the CBOT trading floor.

Source: CME News for Tomorrow
blog comments powered by Disqus

Blog Archive