Chapter One. General Provisions
1. It is made in order to regulate the transaction of blockchain option contract, protect the legal interests of the parties concerned in the transaction of option contract and promote the full functioning of market.
2. The transaction of option contract means the transaction activities with option contract as the Underlying Asset conducted in a public and concentrated way.
3. JEX.com(hereinafter referred to as “Exchange”) shall organize and arranges the transaction of option on the principle of open, fairness, justice and good faith.
4. It shall apply to all the transactions of option conducted in the Exchange and to be abided by all the participants.
Chapter Two. Option Contract
5. Option contract denotes the standardized contract, in the identical form made by the Exchanges, under which the buyer shall be entitled to purchase or sell the agreed Underlying Asset at a specified price at a certain time in future.
6. The option contract includes mainly the clauses of contractual Underlying Asset, type of contract, transaction unit, offering unit, Minimum Price Movement, listing date of contract, exercise date, transaction time, exercise price and listing Exchange, etc.
7. The Underlying Asset of option contract denotes the object targeted by rights and obligation of buyer and seller under the option contract.
The Underlying Asset of option contract herein means the option contract listed in the Exchange for transaction.
8. The type of option contract includes call option and put option.
- The call option means that the buyer shall be entitled to purchase the objective option contract at a certain time in future at specified price and the seller shall fulfill its obligations accordingly, or the seller shall be obliged to make payment of option contract to the buyer with earnings from the price of fulfilling contract which is higher than the exercise price.
The put option means that the buyer shall be entitled to sell the objective option contract at a certain time in future at specified price and the seller shall fulfill its obligations accordingly, or the seller shall be obliged to make payment of option contract to the buyer with earnings from the price of fulfilling contract which is lower than the exercise price.
9. The transaction unit of option contract is “piece”, a piece of contract represent a corresponding right of buying and selling with virtual assets token. The minimum transaction unit for each contract of different types shall be specified in the option contract of the type.
10. The Minimum Price Movement means the minimum value of fluctuated unit price of option contract.
11. The last day of transaction means the last transaction day in which the transaction of option contract may be made.
12. The maturity date means the transaction date in which the buyer to the option contract may exercising its rights.
13. The exercise date means the date in which the buyer to the option contract shall be entitled exercise its option right.
14. The exercise price means the spot price specified in option contract by which the buyer shall be entitled to purchase or sell the object at a certain time in future.
15. The method of exercise shall adopt the European style or other methods determined by the Exchange. The buyer under European style can only exercise its right on the current day of the maturity date of an option contract.
Chapter Three Transaction Operation
16. The investor suitability system shall be implemented for option transaction.
17. The price of an option contract denotes the premium for each offering unit of the option contract.
The premium means the capital which the buyer to the option contract shall pay for obtaining the rights.
18. Unless there are otherwise provisions in the Exchange, the Computer automatic matching system of the Exchange shall sort the applied transaction instructions on the principle of price priority and time priority. When the buying price is higher than or equal to the selling price, the matching transaction shall be concluded automatically.
19. The bid transaction shall become effective after matching transaction by the transaction system and the relevant information shall be transmitted to the user via the system of concluded transaction return.
JEX exchange may make adjustment and announcement of the maximum volume for each transaction of option contract according to the situation of the market.
20. If the bid volume of transaction is unable to be concluded at one time, the balance shall be retained in the transaction system for continuous competitive price transaction, except there are otherwise provisions in the Exchanges.
21. The management rules on the unusual transaction are implemented in the Exchange for supervising the behaviors of any unusual transaction. The concluded transaction shall be canceled by the Exchange if any suspected activities violating the laws, rules or regulations are found.
22. The settlement method of option contract includes closing out, exercise and waive.
The closing out means the method of settling option contract that purchases or sell the option contract with same volume, underlying Asset, month, maturity date, type and exercise price as the held option contract but with reversed direction.
The Exercise means the method of settling option contract that the buyer of option exerts its rights as per relevant provision by purchasing or selling the objective option contract at the exercise price.
The Waive means the method of settling option contract that the buyer does not exert its right when the option contract becomes due.
Chapter Four. Exertion And Performance
23. In the time specified by the Exchange, the buyer of option may apply for exercise and the specific methods in details shall be determined by the Exchange separately.
The seller of option shall be obliged to fulfill its obligations, i.e. when the buyer of option applied for exercise, the seller of option shall be obliged to buy or sell a certain Underlying Asset at the exercise price as per contract.
24. Under spot delivery mode, after exercise and performance of contract for call option and the buyer of option acquired underlying assets at an exercise price, the seller shall receive the amount the same as the exercise price. After exercise and performance of contract for put option and the buyer of option acquired the amount at the exercise price, the seller shall obtain the underlying assets at the same exercise price.
Under the spread delivery mode, after exercise and performance of contract for call option, the seller of option shall make payment of earnings from the part that the performance price is higher than the exercise price to the buyer of option while after exercise and performance of contract for put option, the seller of option shall make payment of earnings from the part that the performance price is lower than the exercise price to the buyer of option.
25. After closing transaction on the maturity date, the following actions shall be carried out by the Exchange:
The position for call option shall apply for exercise automatically when the exercise price is lower than the settlement price of option contract on the current day;
The position for put option shall apply for exercise automatically when the exercise price is higher than the settlement price of option contract on the current day;
Chapter Five. Settlement
26. The buyer in option transaction shall not pay the trading margin when making payment of premium and the seller in option transaction shall make payment of trading margin when receiving the premium.
27. The buyer (seller) of option shall pay (receive) premium at strike price at the time of opening a position and the buyer (seller) of option shall receive (pay) premium at strike price at the time of closing a position.
The Exchange shall determine and announce the level of commission and may make the adjustment thereof according to the situations of the market.
28. For both the buyer and the seller who exercise or waive, the Exchange shall reduce their corresponding position of option contract respectively at the time of settlement, meanwhile release the trading margin provided by the seller of option.
Chapter Six. Risk Management
29. The margin system, position limit system, trading limit system, large position report system and risk warning system are implemented in the exchange for risk management.
30. The margin system is implemented for option transaction.
31. The exchange may determine different levels of trading margin according to different combination of a position in option transaction.
32. The position limit system is implemented for option transaction. It means the maximum volume determined by the exchange for holding by user with respect to speculation position of option contract in a certain unilateral computed month.
33. The exchange may implement the trading limit system for the option contract.
34. In the course of option transaction, in the event of any following situations, the exchange may announce to enter into extraordinary situation and take emergent measures for eliminating the risks:
- the transaction is unable to be conducted due to reasons not attributable to liabilities of exchange such as force majeure like earthquake, flood, fire, or computer system fault, etc.;
- The user confronted with risk of settlement and delivery, which is causing or will cause the substantial impacts on the market;
- It is evidenced that the user violated the rules and implementing regulation of exchanges and it is causing or will cause the substantial impacts on the market;
- Other situations listed by the exchange.
35. The risk warning system is implemented for the option transaction.
Chapter Seven. Information Management
36. The information of option transaction means trading of option transaction generated from option transaction in exchange, statistics of trading data, various announcements issued by the exchange.
37. The information of option transaction is owned by the exchange. The exchange shall make concentrated management and release of information f option transaction and the exchange may manage and operate the information of option transaction independently, cooperative with a third party or delegating to a third party. Without consent of exchange, no individual or entity shall be allowed to make a release of information and the information shall not be used for any commercial purposes.
38. The exchange shall make real-time, delayed, routine, weekly and monthly trading information of option transaction and the statistics information on daily, monthly and yearly option transaction.
39. The real-time information means the trading information issued simultaneously with the transaction occurred in the transaction time. The delayed information means the real-time trading information issued after a certain delayed time. The information mainly includes latest price, ups, and downs, trading volume, bid price, bid volume, highest price and lowest price.
Chapter Eight. Supplementary Provisions
40. All matters which are not expressly provided shall be subject to relevant rules and stipulations on other businesses conducted in the exchange.
41. In the event of any inconsistency between this rules and other business rules, this rules shall be applicable.
42. This rules shall be governed and interpreted by www.JEX.com.
43. It shall be implemented as from the date of issuance thereof.
JEX Site: www.jex.com
December 31, 2017