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which are exchange traded and subject to daily margin requirements and the positions are converted to a Commodity Equivalent according to Part A3.27.
(4) If the above criteria are not met, the Option must be treated under one of the option methods referred in Table A3.4 in Rule A3.23.2.

A3.24.2  Method
(1) The position risk amount for a particular Commodity is the sum of:

        (a)        a net position amount which is calculated by multiplying the absolute value of the net open position in the Commodity by the standard method Commodity Position Risk Factor specified in Table A5.1.8 in Annexure 5 to Schedule 1A; and

        (b)       an additional amount which is calculated by multiplying the gross position in Commodity by the standard method Gross Position Risk Factor specified in Table A5.1.8 in Annexure 5 to Schedule 1A.
(2) Commodity Derivative positions which are Options and are In the Money by at least the standard method Commodity Position Risk Factor for the underlying position specified in Table A5.1.8 in Annexure 5 to Schedule 1A are to be converted to a Commodity Equivalent in accordance with Part A3.27 and included in the net open position.
(3) Commodity Derivative positions which are Options and are not In the Money by at least the standard method Commodity Position Risk Factor for the underlying position specified in Table A5.1.8 in Annexure 5 to Schedule 1A, are to be converted to a Commodity Equivalent in accordance with Part A3.27 and:
(a)        where the resulting Commodity positions from the Option increases the net open position in the Commodity if included, the position must be included in the net open position; and
(b)       where the resulting Commodity positions from the Option decreases the net open position in the Commodity if included, the position must be excluded in the net open position.

Part A3.25 Margin method—Commodity position risk

A3.25.1  Application
Commodity Derivative positions which are exchange traded and have a positive Primary Margin Requirement must be included in the margin method if the Market Participant is not permitted to use any of the other methods referred to in Rule A3.23.2.

A3.25.2  Method

The position risk amount for Commodity Derivative positions under the margin method is 100% of the Primary Margin Requirement for those Commodity Derivative positions as determined by the relevant exchange or clearing house multiplied by four.

Part A3.26 Basic method—Commodity position risk

A3.26.1  Application
Commodity Derivative positions which are purchased (long) or written (short) Options may be included in the basic method.

A3.26.2  Method

(1) The position risk amount for a purchased Option is the lesser of:

(a)        the mark-to-market value of the underlying Commodity position multiplied by the standard method Commodity Position Risk Factor specified in Table