From CME Group:

In commodities, short-term options are divided into Weekly options, New Crop Weekly options, and Short-Dated New Crop options for Agriculture, and Weekly options for Energy and Metals. Short-term options have manageability, flexibility, lower premiums, higher gamma, and greater sensitivity to time decay. They have become popular due to high volatility and geopolitical risk, as seen in the soybean and WTI CVOL charts. New expiration dates and greater listing options are attracting more market participants.

The impact of the Ukraine-Russia war has caused supply disruptions in oil, natural gas, corn, and wheat, leading to elevated commodity prices. The increased customization opportunities offered by the expansion of listing new expiration dates are attracting a wider range of market participants and enhancing market efficiency and price discovery function in the commodities market.

The types of short-term options in commodities are classified by asset class and tenor for agriculture, energy, and metals. These options provide greater flexibility and adaptability to respond to market events in managing risks and providing trading strategies.

Weekly options in commodities are versatile tools for hedging against losses, generating profits, and capitalizing on short-term price fluctuations. Their growth in commodities is driven by many factors, including the increased uncertainty and volatility in the market.



Read more: Short-Term Options in Commodities: Potential Benefits and Applications