Canadian Derivatives Exchange*

Options on Exchange-Traded Funds

Underlying issues

Units of an exchange-traded fund, subject to eligibility criteria set by the Canadian Derivatives Clearing Corporation (CDCC).

Eligibility criteria

Underlying issues must meet stringent eligibility requirements, including sufficient liquidity and market capitalisation.

Trading unit

One contract represents 100 units of an exchange-traded fund (may be adjusted for stock splits, distributions, etc.).

Expiry cycle

At a minimum, the nearest three expiries plus the next two expiries in the designated quarterly cycle: March, June, September, December. Annual expiry of March for long term options.

Minimum fluctuation of the option premium

  • Options priced below C$0.10 = C$0.01
  • Options priced at C$0.10 or more = C$0.05

For more information on penny trading, refer to circular 031-13.

Strike prices

At a minimum, five strike prices bracketing the current underlying issue's market price.

Contract type

American style.

Last trading day

The third Friday of the contract month, provided it is a business day. If it is not a business day, trading will cease on the first preceding business day.

Expiration day

The last trading day of the contract month.

Position reporting threshold

500 contracts on the same side of the market, in all contract months combined.

Position limit

Information on position limits can be obtained from the Bourse as they are subject to periodic changes. See Circulars.

Price limit

A trading halt will be invoked in conjunction with the triggering of "circuit breakers" on the underlying issues.

Exercise

Via the Canadian Derivatives Clearing Corporation (CDCC).

Delivery

Via the CDS Clearing and Depository Services Inc., on the third business day following the exercise date.

Trading hours

9:30 a.m. to 4:00 p.m.

The regular session opens at 9:30 a.m. Each option class will then open for trading when a trade occurs on its underlying issue on a recognised Canadian exchange. If no such trade has yet occurred, the option class will open for trading at 9:35 a.m.

Clearing corporation

Canadian Derivatives Clearing Corporation (CDCC).

Trading procedures