OREANDA-NEWS. October 18, 2010. Starting from October 18, 2010 FORTS, futures and options market of RTS, will start trading on options contracts on Brent oil. Code of the contract in the trading system is (BR). The underlying asset of the contract is a futures contract on Brent oil.

The contracts will be settled on a monthly basis.

They will be convenient both for experienced investors who wish to use options for creating high-performance strategies on the utilities derivative market and for major Russian oil producers and consumers for hedging against risks related to price fluctuations on the global oil markets.

Evgeny Serdyukov, Director of the Futures & Options Market at OJSC RTS comments: "Oil producers and consumers will gain an opportunity to hedge market risks by this new RTS’s financial instrument. Participants of the financial market will be able to create nonlinear strategies and form portfolio consisting of several options and futures contracts on oil that would return guaranteed interest within the determined period or within some price limits and would not depend on oil price changes. Banks will afford to establish structured products based on this option with the link between their yield and oil price and with the guaranteed return of capital."

Participants of oil and oil products market are prepared to use the options contracts in their production activity. Aleksey Burakov, CEO of ‘Alforithm.Toplivny integrator’ CJSC,said: "RTS broadens the range of instruments available on the Russian oil and oil products exchange market regularly, and that is a positive trend because introducing of this new instrument will give oil market traders an opportunity to link deliveries of real oil and oil products at fixed price for their clients with the ability to manage their own market risks. On the one hand, such instruments provide the opportunity to ensuring fix price on oil or oil products to clients, on the other hand, they let mitigate default risks arising from negative changes of prices on the oil market for traders."

At the moment futures on Brent and Urals oil are traded on RTS derivative market. Launching of the new instrument will extend the segment of oil and oil products derivatives.

Oil market is the biggest market in Russia. Oil production volume reaches 500 million tons per year. Share of the Russian Federation in the global market of oil production amounts to 11%. The biggest Russian oil producers are Gazpromneft, Lukoil, Rosneft, Surgutneftegas and TNK-BP.

The important source of oil price data can be exchange trading information of OJSC RTS (futures contracts under the codes BR and UR).