ICE Brent crude oil futures contract is a contract that can be physically delivered, and the contract can choose EFP settlement. The contract has the following characteristics:
High flexibility: By providing futures contracts corresponding to the spot market, the oil industry can use EFP and basis trading to lock in prices and arrange production, so that it can better to control the time of buying and selling goods.
Price Transparency: Real-time prices are available through major data providers. Therefore, all participants can understand the price situation in real time when trading.
Small-lot trading: Futures trading provides the possibility to trade in small quantities (multiples of 1,000 barrels), while the spot market has higher volume standards.
Strong contract security: London Clearing House (LCH) is the other party to buyers and sellers who trade on the London exchange. This guarantees the financial soundness of every contract traded by (exchange clearing members), including delivery and clearing. LCH has no obligation or contractual relationship with customers of its members (i.e. non-member users or non-clearing members of the exchange).
Contract unit: 1,000 barrels (42,000 gallons).
Contract month: 12 consecutive months, extended to a maximum of 24 months after the first quarter, and to a maximum of 36 months after half a year.
Quotation method: US dollars and cents per barrel.
Minimum price fluctuation: US$0.01 per barrel.
The minimum contract change is: USD 10 per contract.
Daily price limit: No price limit.
Last trading day: If the 15th day from the first day of the delivery month is a London banking day, trading shall cease at the close of that day. If the day is a non-banking day in London (including Saturdays), trading will cease on the working day before that day, a date published by the exchange.
Delivery date: The ICE Brent crude oil futures contract is a deliverable contract (converted into spot through futures), and you can also choose to conduct cash settlement based on the Brent index price on the day after the last trading day. If cash delivery is required, the exchange must be notified within one hour after the trading halt (the same procedure as the clearing house), and liquidation will be carried out through LCH within two working days after the trading halt.
Futures-to-Physics (EFP) and Futures-to-Swaps (EFS): EFP and EFS transactions in the delivery month can be reported to the exchange during the trading hours of the delivery month, and will be suspended after the transaction is stopped (trading suspension ) will be registered by LCH within one hour. This will give market participants who also hold over-the-counter trading positions more opportunities to avoid risks.
Position limit: No limit.