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Coal

API 2 cif ARA and API fob 4 Richards Bay (Argus/McCloskey) coal swap contracts
Description

Cash settled API 2 cif ARA (Argus/McCloskey) or API 4 Richards Bay (Argus/McCloskey) coal swap contract.

Contract CodesAA2, AA4
Lot Size

One lot is equal to 1000 tonnes.

Minimum Contract Size1 lot.
CurrencyUS ($)
Minimum Tick SizeFive cents per tonne, $0.05/tonne
Settlement PriceLEBA closing price or such other price as may be prescribed by the Clearing House from time to time.
Contract SeriesFront 4 contract months, the front 4 to 7 quarter contracts (i.e. quarter contracts up to the end of the front calendar year), 5 whole season contracts and up to 4 calendar years.
Expiry DayMonth contracts will cease trading at the close of business on the last Friday of the contract delivery period. Quarters, seasons and calendar years cease trading as a quarter/season/calendar year at the close of business on the last Friday of the first month contract in that quarter/season/calendar year.  Where the last Friday of the month is a non-business day, the expiry day will be the first business day preceding that Friday.
Delivery and SettlementContracts will be cash settled at the average of weekly Argus/McCloskey API 2 (cif ARA) or API 4 Richards Bay index prices for the contract month as published in Argus/McCloskey’s Coal Price Index Report.

API 2 cif ARA and API 4 fob Richards Bay (Argus/McCloskey) coal option contracts
Description

Single expiry, premium paid, option on the underlying API 2 cif ARA or API 4 Richards Bay (Argus McCloskey) Coal Swap contract for the corresponding expiry.

Contract Codes

A2Q, A4Q (quarters)
A2C, A4C (calendars)

Lot Size

1 lot = 1,000 tonnes per month. Therefore 1 lot in a quarter contract will comprise 3,000 tonnes; 1 lot in a calendar contract will comprise 12,000 tonnes.

Minimum Contract Size1 lots.
CurrencyUSD
PricingUSD and cents per metric tonne
Minimum Tick$0.01 per tonne
Option TypeOptions are single expiry European style options and will be automatically exercised on the expiry day if they are "in the money" unless set to expire manually. If an option is "out of the money" it will expire automatically unless exercised manually. Manual exercise is only permitted on expiry day.
Option PremiumThe Premium is paid at the time of purchase.
Last Trading Day30 days prior to commencement of the underlying Coal swap contract. Where this is a non working day expiry will be on the business day immediately prior; e.g. the Calendar 2012 and Q1 2012 contracts will expire on 02/12/2011.
Expiry

17:00 hours UK time on the last trading day

Automatic exercise settings are pre-set to exercise contracts which are one minimum price fluctuation or greater "in-the-money" when compared to the relevant reference price.

Contracts are single expiry options. A quarter contract will expire in to the underlying monthly swap contracts that comprise the quarter on last trading day. A calendar contract will expire into the underlying monthly swap contracts comprising January through December on last trading day.

Members are permitted to override automatic exercise settings or manually enter exercise instructions for this contract.

The reference price will be a price in USD and cents, equal to the final settlement price for the underlying API 2 Swap contract.

For these purposes "final settlement price" means the final settlement price on the expiry day of the underlying (Argus/McCloskey) API 2 (cif ARA) or API 4 Richards Bay Swap contract.

Contract Series

3 to 6 quarter contracts and 3 whole calendar contracts.

All option contracts expire into the underlying months of the corresponding contract series.

Strike Price

Any whole $ value

MarginOptions will be subject to Initial Margin and Net Liquidation Value variation margin on a daily basis.
Business DaysUK business days.

Trademark and copyright notice

API 2 and API 4 are trademarks and are used under license from Argus Media Limited and IHS Global Limited. All copyrights and database rights in the API 2 and API 4 indices belong exclusively to Argus Media Limited and IHS Global Limited and are used herein under license. LCH.Clearnet Ltd is solely responsible for the API 2 cif ARA and API 4 fob Richards Bay (Argus/McCloskey) Coal Swap and Options Contracts. Argus and IHS take no position on the purchase or sale of LCH.Clearnet's financially settled listings.