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Originating department:Commercial Services
Company Circular No:LCH.Clearnet Ltd Circular No 3062
Service Circular No:LCH EnClear No 351
Date:16 January 2012
To:All LCH.Clearnet EnClear Clearing Members

Launch of LCH EnClear OTC clearing service for Iron Ore Options

LCH.Clearnet is pleased to announce that it will be launching an OTC Clearing service for Iron Ore options on Monday 23 January 2012 . The service is an extension of LCH.Clearnet’s existing LCH EnClear OTC clearing  service for Iron Ore TSI swaps.

Contracts will be cleared using the ClearWay and ECS systems and will be exercisable into the underlying TSI swaps contracts.

All Members currently clearing Iron Ore swaps will automatically have access to the option contracts. Members not currently clearing Iron Ore swaps, but approved to clear Freight (FFAs), will need to complete a static data form.

Additional information

Contract Specification 

Contract description – Cash Settled Premium Paid Option on TSI Iron Ore (62% Fe) contract

Cash settled Premium Paid Option on the TSI Iron Ore contract
The contract, if in-the-money, expires into the underlying Iron Ore swap with a traded price equal to the Strike Price

Lot size1,000 mt
CurrencyUS Dollars
Minimum tickUS $ 0.01 per mt
Option PremiumThe Premium is paid at the time of purchase.
Last trading day

Last business day of each month within the contract series.


18:00 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.

Members are not permitted to override automatic exercise settings or manually enter exercise instructions for this contract.

The reference price will be a price in US dollars and cents per metric ton equal to the final settlement price for the underlying Iron Ore swap contract.

Contract seriesOut to a maximum of 35 months
Strike PriceAny whole $ value
Business daysUK business days

If you have any questions relating to this circular, please do not hesitate to contact me on Isabella.kurek-smith@lchclearnet.com or +44 20 7426 7460.

To request a Static Data Form please contact our Membership department on membershipofficers@lchclearnet.com or 0207 426 7949.

Yours sincerely

Isabella Kurek-Smith
Director, Head of Energy and Freight Markets
Commercial Services