Trading in Imarex Freight Options (IFOs) launched today

IMAREX and NOS have developed this product together, in order to offer a wider service to our members, and to continue offering an ever widening range of trading products to the market.

To increase the understanding of freight options and how to use IFOs in hedging and trading, IMAREX will offer education through courses, and distribution of pricing models to members.

IMAREX will in addition offer an information service on the freight option market similar to the forward curves that are sent out on a daily basis. Options will also be included in NOS’ reporting of risk parameters.

NOS will clear the IFOs according to Appendix 5 of the Rulebook and IMAREX and NOS will work together to develop both transparency and liquidity through trading and clearing of freight options.

Updated Rulebook and Notice 01/2005  with the amendments to the Rulebook related to introduction of options. Members only trading options will not be affected by the changes in the Rulebook.

The IFOs will initially be matched manually by the MPS (Imarex Marketplace Service) but all trades and price interest will be displayed on the options price board, soon to be launched on the Imarex trading system.

IMAREX and NOS are initially opening for trading in TD3 IFOs, but aim to add IFOs to other trading routes in the near future.

Structure:

• The IFOs will be available for trading and clearing for all IMAREX and NOS members.
• The IFOs will be structured as monthly Call and Put options for the term of the entire Imarex forward curve.
• The IFOs will be “Asian style” with automatic exercise by NOS. All IFOs will be settled against the arithmetic average of all Baltic Exchange quotes for all index days of the month.
• The minimum contract size for all IFOs will be 5 lots.
• The total trading and clearing fee for the IFOs, will be 2% of the option premium.
• IMAREX will initially set the strikes of the option contracts before trading and clearing commences. The strikes will move in steps of 10 Worldscale points, (i.e. 70, 80, 90 etc). Initially, three option strikes for each Call Option and Put option with corresponding Delivery Periods, will be set.

Our target is to develop IFOs to become the new model for standardised freight options, with clearing.

IMAREX and NOS will work together to build the structure, liquidity and transparency in the IFO market.

The members of IMAREX/NOS will only be able to trade and clear IFOs through the IMAREX Market Place Service.

Contact information:

For more detailed information regarding IFOs, please see the Rulebook and Appendix 5 (Product Specifications).

See: http://www.imarex.com/membership/rulebook

For information on educational courses, and how to receive pricing models, please contact: 

• Morten E. Pettersen, Imarex Director of Exchange Development tel:  +47 23 89 42 32

For questions related to clearing please contact:

• Hanne Bævre Johansson, VP Commodities at NOS on tel: +47 23 25 93 20

For all other enquires, please contact Imarex in Oslo or Singapore:

• Marketplace support Oslo:  +47 2389 4220
• Marketplace support Singapore:  +65 6720 0050

Dowload a The full release here: