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).
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.
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.
Beijing time: 9:30am-11:30pm
The market is closed during statutory holidays in China.
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.
- Emergency Operating Procedures for the Interbank FX Trading System
- China Foreign Exchange Trade System Product Guide (FX Market) V2.9
- Notice on the Improved Arrangements for Overseas Participating Banks of RMB Purchases and Sales Business and Overseas RMB Clearing Banks to Enter China Interbank FX Market
- CFETS Foreign Currency Lending Membership Application Form