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Description

The EU-Style Brent Option is based on the underlying ICE Brent Bullet Future (BNB) and will automatically exercise into the settlement price of the Bullet Future on the day of expiry of the options contract.

Market Specifications

Trading Screen Product Name

Crude Futures

Trading Screen Hub Name

Brent Euro Option (Cash Settled)

Contract Symbol

BUL

Hedge Instrument

The delta hedge for the EU-Style Brent Option is the ICE Brent Bullet Future (BNB)

Contract Size

1,000 barrels

Unit of Trading

Any multiple of 1,000 barrels

Currency

US Dollars and cents

Trading Price Quotation

One cent ($0.01) per barrel

Settlement Price Quotation

One tenth of one cent ($0.001) per barrel

Minimum Price Fluctuation

One tenth of one cent ($0.001) per barrel

Last Trading Day

Trading shall end three Business Days before the scheduled cessation of trading for the relevant contract month of the ICE Brent Crude Futures contract.

If the day on which trading in the relevant EU-Style Brent Option is due to cease would be either: (i) the Business Day preceding Christmas Day, (ii) the Business Day preceding New Year’s Day, or (iii) the US Thanksgiving Day, then trading shall cease on the next preceding Business Day.

Option Style

Options are European-style and will be automatically exercised on the expiry day if they are “in the money”. The future resulting from exercise immediately goes to cash settlement relieving market participants of the need to concern themselves with liquidation or exercise issues. If an option is “out of the money” it will expire automatically. It is not permitted to exercise the option on any other day or in any other circumstances. No manual exercise is permitted.

Expiry

19:30 London Time (14:30 EST)

Automatic exercise settings are pre-set to exercise contracts which are one minimum price fluctuation or more “in the money” with reference to the relevant reference price. Members cannot override automatic exercise settings or manually enter exercise instructions for this contract.

The reference price will be a price in USD and cents per barrel equal to the daily settlement price of the ICE Brent Bullet Future (BNB) for the contract month on the Last Trading Day. When exercised against, the Clearing House, at its discretion, selects sellers against which to exercise on a pro rata basis.

Option Premium / Daily Margin

EU-Style Brent Options are premium-paid-upfront options. The traded premium will therefore be debited by the Clearing House from the Buyer and credited to the Seller on the morning of the Business Day following the day of trade. Members who are long premium-paid-upfront options will receive a Net Liquidating Value (NLV) credit to the value of the premium which is then used to offset the initial margin requirement flowing from both these options and positions in other energy contracts. Members who are short premium-paid-upfront options will receive an NLV debit in addition to their initial margin requirement. NLV is calculated daily with reference to the settlement price of the option.

Strike Price Intervals

A minimum of 10 Strike Prices in increments of $0.50 per barrel above and below the at-the-money strike. Strike Price boundaries are adjusted according to futures price movements. User-defined Strike Prices are allowed in $0.01 increments.

Contract Series

Up to 36 consecutive months, or as otherwise determined by the Exchange

Final Payment Date

Two Clearing House Business Days following the Last Trading Day.

Business Days

Publication days for ICE

MIC Code

IFEU

Clearing Venues

ICEU

Trading Hours

Codes