Trading Specifications

Product definition

An RMB/FX options trading (hereinafter referred to as an “options trading”) refers to any trading giving one party the right to trade a certain volume of FX assets at an agreed exchange rate on a given trading day. The option buyer acquires such a right by paying an option premium; the option seller collects the option premium and performs its obligation when the buyer chooses to exercise its right (vanilla European options).  

Product description

In an options trading, the subject matter is the foreign currencies bought and sold. The currencies, amount, period, pricing parameters (volatility rate, execution price, spot price/forward exchange rate, domestic and foreign currency interest rates), transaction price (option premium) and settlement arrangements, etc., are agreed upon through negotiations between the two parties to the transaction.

Trading method

Bilateral inquiry.

Quotation targets

Currency pairs such as USD/CNY, EUR/CNY, JPY/CNY, HKD/CNY and GBP/CNY , and implied volatility rates corresponding to 25 Delta Call, ATM and 25 Delta Put.

Trading hours

Beijing time: 9:30am-11:30pm

The market is closed during statutory holidays in China.

Settlement method

The two parties to the transaction settle through the agreed method. Currently, most transactions are settled bilaterally.  

Purpose of products

To manage exchange rate risk and control financial costs.