CME Group Plans to Launch New Aluminum Options Contracts

SEATTLE (Scrap Monster): The Chicago Mercantile Exchange (CME) announced plans to launch new aluminum options contracts in the month of May this year. The launch of new contracts is considered part of the exchange’s efforts to canvassing traders away from its rival London Metal Exchange (LME), especially in the wake of recent halt in nickel trading.

ALSO READ:

CME Group Announced Launch of Micro Copper Futures on May 2

CME Bids to Boost its Metal Storage Network, Challenge LME

Incidentally, CME Group has made significant strides in its competition with the LME in recent years. The CME copper futures and options contracts have recorded strong growth over the years. It now looks to replicate that expansion in aluminum. The CME is seen offering several incentives to traders to boost its aluminum futures contracts, which have so far remained less popular among traders.

The new aluminum options contract will be launched on May 23^rd, subject to regulatory approval, said the CME statement.

Meantime, the CME Group did not make any announcement with regards to plans to move into new base-metal markets like nickel and zinc- a move that would help it to offer a more fully-fledged alternative to the LME. The exchange will be very thoughtful about adding new contracts, said Young-Jin Chang, head of metals at CME Group.

As per trading firms, the new contract will provide more flexibility to manage adverse price movements and transparent price discovery.