The first cleared salmon option traded at Fish Pool – Fishupdate.com
The first cleared salmon option traded at Fish Pool Published: 23 February, 2010
The first cleared salmon option was traded at the regulated market place Fish Pool on Friday, February 19th. The option was a Call Q3-10 with 50 Tons / month, strike 35.00 and a premium of 1.00 NOK / kg.
“This is a historic moment for financial salmon”, says CEO in Fish Pool ASA, Søren Martens. “We only recently opened the market for options but expect an increased interest for trading when introducing a Market Maker in the near future. The Market Maker will continuously place a spread for Call and Put options he continues.
It is possible to trade options, both bilateral and cleared at Fish Pool. Participants in the cleared market are trading anonymously. For the first cleared option, the two parties have accepted to come forward and tell who they are and why they traded this option: The option was written by Johan Andreassen in Villa Group Invest AS. “I believe that options are very interesting instruments, both for hedging and investment purposes,” says Johan Andreassen. “I had already bought a forward contract for Q3-10 at a lower level than the current strike. By writing the option I receive a premium of NOK 150,000.
Assuming that the salmon price does not go over 35 NOK / kg in Q3 I keep the premium. If not I must pay to the counterparty. Since I have a profit on the forward contract if the price rises, I am well covered and thus have relatively low risk “continues Andreassen. “Options are great instruments, not least for the players in the physical markets. We are eager to gain experience based on the trade that we have done “he concludes.
The buyer of the option was the Norwegian investment bank Pareto who acted on behalf of a client. “Both we and our customer viewed the option as a good investment opportunity,” says Tor Svelland in Pareto.