Trasteel completed the third and largest ever options trade on the CME Group’s north EU HRC contract today.
The company sold a 6,000t December call option — the right to buy — at a strike price of €625/t and a premium of €26/t. This means Trasteel will receive a one-time payment of €26/t and be obligated to sell at €625/t, irrespective of where the market is, if the underlying Argus north EU HRC index monthly average reaches this level by the end of December.
Trasteel has sold the option as part of a hedge for its physical positions.
There was another options trade on the contract today, with a 2,000t December call sold at a strike price of €625/t and a premium of €21/t. This option was sold by a different participant, according to market sources. The first trade was completed in October.
Traders and service centres have booked substantial import tonnes for the fourth quarter, to get ahead of CBAM and any potential quota changes; the contango has helped those looking to hedge their positions.