The Dalian Commodity Exchange will speed up preparations for options trading and hasten new product development to boost its position in China's futures market, the bourse said yesterday in outlining its 2006 working agenda.

 

"The exchange enjoys huge potential for further development in its crop contracts when compared with overseas counterparts such as the Chicago Board of Trade," the bourse said.

 

The exchange has been working on soybean options for years but has yet to apply to the China Securities Regulatory Commission (CSRC), a board official said. There is no options trading in China's futures market at present. Options, popular in developed derivatives market, can help investors hedge their investment.

 

The bourse will also improve existing rules on current contracts to adjust investor structure and add liquidity in the market, it said.

 

The commodity exchange will cooperate with educational institutions to train futures professionals as part of its steps to boost its position in China's booming futures market.

 

The bourse in Liaoning Province is now the biggest futures exchange on the Chinese mainland in terms of turnover.

 

It now trades in soybeans, soy meal, soy oil and corn in northeastern China.

 

The bourse traded 4.74 trillion yuan (US$589 billion) worth of contracts last year, accounting for 35.27 percent of the country's total.

 

China is quickening the development of its futures market by introducing more tradable products as the country seeks more financial tools such as derivatives to hedge risks.

 

China allowed soy oil and sugar futures trading this year. The newcomers brought the number of available contracts in China to 13, including metals, crops and fuel oil.

 

(Shanghai Daily February 17, 2006)