The Application Of Cotton Futures Listed On Zhengshang Was Approved, And The Market Participants Said It Was "Three Positive".

A few days ago, the Zhengzhou commodity exchange (hereinafter referred to as the Zheng Shang) cotton option listing application has been approved by the SFC, cotton option will become the second option varieties launched by Zheng Shang.

This is a major move taken by Zheng Shang to implement the spirit of the Central Document No. 1 on the policy of "further promoting the construction of futures and options markets for agricultural products", which will further enhance the ability and level of the futures market to serve the real economy.

The official of Zheng Shang said that the company will strengthen coordination and coordination in accordance with the unified arrangement of the SFC, conscientiously do a good job in the work of market organization, rules making, technical system preparation, investor education, etc., and effectively improve the market supervision and risk prevention system, and do a good job in market training and publicity.

In recent years, Zheng merchants have been actively developing the commodity options market and serving the high quality development of the real economy.

On the basis of the smooth operation of the sugar option and the actual situation of combining the real economic demand and the spot market basis, the cotton business is used as the second commodity option variety.

In 2018, Zheng Shang firm carried out various preparations for the listing, completed the contract draft design, rules sorting, technical testing, market selection and other work, and through the "option workshop", "three industry" activities and video lectures, etc., actively engaged in cotton enterprise options knowledge training, a total of 750 cotton training enterprises and 3063 times.

In addition, cotton option simulation pactions are also ongoing.

Recently, in the cotton options demonstration activities organized by Zheng Shang, China Textile Group, Louis Da Fu and Henan TongZhou cotton industry and other enterprises indicated that more flexible and diversified risk prevention tools would help the cotton enterprises to improve their quality and efficiency and achieve high quality development, and called for the cotton option to be launched as soon as possible.

According to Wei Gangmin, chairman of Tongzhou cotton industry in Henan, China's cotton market is from September to August of next year. Under the background of the current Sino US trade friction and the new cotton purchase and sale period, cotton growers, ginning mills, traders and cotton textile enterprises are facing the risk of cotton sales or procurement. The market parties have a strong demand for avoiding risks by using cotton options, hoping that Zheng merchants can list cotton options as soon as possible.

Market participants said that after the listing of cotton options, one is conducive to innovation tools and means, providing useful reference and supplement for the existing subsidy policy, and further stabilizing the cotton growers' income.

Two is conducive to risk management of cotton enterprises.

There is no capital additional risk in call option. The main body of China's cotton industry chain, especially the middle and lower reaches of ginning mills, traders and cotton spinning enterprises, has great capital turnover pressure and weak ability to resist risks. It is more suitable for managing cotton price risk with cotton options, and is conducive to forming a synergistic effect of "policy protection farmers, tool protection industry chain".

Three is conducive to improving cotton "insurance + futures" pilot, explore cotton "insurance + option" mode.

Developing cotton option trading can provide hedge options for the "insurance + futures" pilot, reduce risk hedging costs, enhance insurance capabilities, enrich risk control measures, and reduce premiums for cotton farmers, thereby enhancing the efficiency of the "insurance + futures" pilot operation.

Insurance companies and Futures Company risk management subsidiaries can also directly use the cotton field options to design price insurance or income insurance products, and explore the "insurance plus option" mode with lower cost.

Relevant officials of Zhengshang said that the next step is to arrange the arrangement in accordance with the SFC's unified arrangements, strengthen coordination and co-ordination, and actively prepare for listing.

According to market feedback, we should improve cotton option contracts, seriously carry out joint monitoring of technical systems, ensure the safe operation of technology systems, complete market maker selection and agreement signing, and carry out investor education, so as to ensure the smooth and stable operation of cotton options.