> Notice No. 01-350
> October 22, 2001
>
>
>
> TO:		All COMEX Division Members/Member Firms
> All COMEX Division Clearing Members
> All COMEX Division Floor Traders
> All COMEX Division Operations Managers
>
> FROM:	Michael Campanelli, Vice President
> 	Floor Operations / COMEX Division
>
> RE:		Options Expiration Operational Procedures for the Trading
> Floor and 			Clearing Members - Shortened Hours
> __________________________________________________________________________
> ____
>
> The expiration date for the November 2001 options contract for Copper (HX
> X1) is Friday, October 26, 2001.
>
> GENERAL OPERATIONAL PROCEDURES
>
> All Clearing Members and Qualified Floor Traders that carried an options
> position as of the close of business day prior to the expiration day, or
> engaged in trading activity on Expiration Day in the expiring options
> contract will be required to have a knowledgeable, duly authorized on-line
> trade entry ("OLTE") system trained representative available until
> released by the Exchange staff.  All adjustments  and/or corrections, must
> be accompanied by relevant supporting documentation prior to being
> incorporated into expiration processing, in essence making the expiration
> processing an extension of the afternoon trade resolution procedures.
>
> Exchange Clearing (299-2110) and Trade Processing (299-2465 and 299-2044)
> personnel will be available to assist with the processing of notices of
> Exercise and Abandonment, position transfers, trade corrections and other
> questions or problems you may have.
>
> Failure by any Clearing Member or qualified Floor Trader to comply with
> procedures as outlined herein may result in severe disciplinary action by
> the Exchange and potential financial liability to customers or members for
> failure to exercise diligence in the processing of information.
>
> TRADING FLOOR OPERATIONAL PROCEDURES
>
>
> The following schedule of operational procedures is based on shortened
> trading hours as described in Notice to Members # 01-333
> (http://www.nymex.com/refernce/notices/2001/ntm_333.htm)
>
> Trading in the November 2001 Copper Options Contract will cease at 1:00
> P.M. on October 26, 2001.  All Brokers and Traders must inform their
> Clearing Members of their intentions to exercise or abandon such Options
> by 3:00 P.M.
>
> On Friday, October 26, 2001, all Brokers and Clearing Members must have a
> duly authorized, On-Line Trade Entry ("OLTE") system trained
> representative available until such time as the Exchange deems necessary.
>
> NOTE:	After 3:30 P.M. all expiring option trade data must be inputted on
> special "OLTE" terminals located in the Trade Processing Room.  Any other
> means of submission will be rejected by the Exchange.  Members will be
> able to submit all other trade data until 4:00 P.M.
>
> After the Unmatched Trade Reports and the Preliminary Spot Month Matched
> Trade Reports are displayed, Clearing Member representatives will be able
> to pick up their Preliminary Clearing reports at the Clearing Department.
>
> A final review of all submissions will be made.  The Supervisor of the
> Trade Processing Room will detain only those Clearing Members and/or
> Broker representatives involved.  All final corrections will be made at
> this time and upon determination of the Supervisor that all option
> processing is complete, all representatives will be released.
>
> Exchange Reports based on Friday's submissions and processing will be
> available on Monday morning October 29, 2001.
>
> In the event that you have any questions regarding these trading floor
> procedures please contact Michael Campanelli at (212) 299-2072 or David
> Sherman at (212) 299-2061.
>
> CLEARING DEPARTMENT OPERATIONAL PROCEDURES
>
> 1.	OPEN POSITION CONFIRMATION ("OPC") - The OPC should reflect as
> accurately as possible all futures and options gross positions as of
> close-of business on the business day prior to expiration.  Review the
> estimated current gross positions as shown and make appropriate
> adjustments.  The OPC must be submitted not later than 9:00 A.M.
>
> 2.  	OPTIONS EXERCISE/ABANDONMENT REQUESTS FORM ("E/A") - An expiring
> option with a strike price in-the-money by one tick or more will be
> subject to automatic exercise unless an Option Abandonment Request form is
> submitted advising that a Clearing Member ("CM") elects to abandon some or
> all of its position in that strike price (i.e., for the option series).
> All other options series in the expiring month will be subject to
> automatic abandonment unless an Option Exercise Request form is submitted.
> When submitting an E/A form, please note the following:
>
> (a)	An E/A form must be submitted not later than 4:00 PM.
> (b)	Do not submit an Exercise form for positions in strike prices which
> are subject to automatic
> 	Exercise nor submit an Abandonment form for positions in strike
> prices which are subject to automatic abandonment.
> (c)	If a CM wishes to submit an E/A form to abandon a position in a
> strike price subject to automatic exercise or wishes to exercise a
> position in a strike price which is out of the money, it is necessary to
> notify Clearing by telephone of such anticipated action.  The CM must have
> an officer available to confirm such intention.
> (d)	CMs may secure from Clearing a time-stamped receipt of the CM copy
> to assure submission 	of the CM's E/A forms.
>
> 3.	OPTION POSITION REDUCTION REQUEST FORM ("OPRR") - As a general rule,
> purchases and sales of option contracts are presumed to be new business.
> If some or all of your purchases and sales are in fact undertaken for
> position liquidation purposes, OPRR forms may be submitted on the day of
> expiration and will be used in conjunction with trade data to reduce your
> projected position in an expiring contract.  OPRR requests in excess of
> actual traded volume will be rejected.  Exception: Cabinet trades and
> cancel correction trades will automatically liquidate existing positions,
> therefore do not submit an OPRR form for cabinet or cancel correction
> trades.
> The OPRR form must be submitted not later than 4:00 PM.
>
> 4.	HOUSE/CUSTOMER POSITION TRANSFER REQUEST FORM ("H/C") - H/C forms
> may be used only to transfer previously cleared contracts between a CM's
> house and customer accounts.  Problem trades (those which have not cleared
> prior to expiration day) must be corrected using COMEX's on-line trade
> entry system under the direct supervision of the Trade Audits Department
> of COMEX ("Trade Audits").  The H/C form must be submitted not later than
> 2:30 PM.
>
> 5.	EX-PIT POSITION TRANSFER REQUEST FORM ("Ex-Pit") - Ex Pit forms may
> be used only to transfer previously cleared contracts between CMs.
> Problem trades (those which have not cleared prior to expiration day) must
> be corrected on the on-line trade entry system under the direct
> supervision of Trade Audits.  The Ex-Pit form must be submitted not later
> than 2:30 PM.
>
> 	*****
> A)	At approximately 3:15 PM, two PRELIMINARY reports of the expiration
> process will be available for distribution at the NYMEX Clearing
> Department:
> 1.	OPTION EXPIRATION REPORT AND CONFIRMATION - The purpose of this
> report is to project the CM's present position going into the expiration
> based upon the transactions which have already been submitted to Clearing.
> CMs should review and modify their adjusted gross positions as of
> close-of-business on the business day prior to expiration.  Further
> adjustments may be submitted not later than 4:00 PM.  The projected ending
> gross positions will reflect transactions accepted or rejected for
> clearance on expiration night, inclusive of Ex-Pit, H/C and OPRR
> transactions which have been submitted to Clearing prior to 2:30 PM, and
> trade information submitted to COMEX prior to 2:45 PM.  Normally, this
> report will also reflect manually submitted Exercise and Abandonment
> instructions, the projected number of exercises and maximum potential
> assignments for each strike price, the type of exercise (manual or
> automatic), whether the strike is In, At or Out of the money, and the
> exercise value associated therewith based on settlement prices established
> by COMEX on the day of expiration.
>
> 2.	TRANSACTION LISTING - This listing will include in detail all
> expiring option trades submitted to COMEX prior to 2:45 PM on expiration
> day, and all H/C, ExPit, OPRR and E/A transactions submitted to Clearing
> Prior to 2:30 PM.
>
> Please note: Trade information reflected on the option expiration report
> and transaction listing are trades submitted only. To inquire whether
> trades have matched, each CM must review the trade reports provided by
> COMEX's On-Line Trade Entry ("OLTE") system.
>
> B)	At approximately 4:30 PM, FINAL reports of the expiration process,
> including all submissions to Clearing and trade information submitted to
> COMEX made by 4:00 PM, will be available for distribution at the NYMEX
> Clearing Department.
>
> C)	At 4:45 PM, Preliminary In The Money Abandonment and Out Of The
> Money Exercise information will be announced on Fast Facts.
>
> D)	At Approximately 6:30 PM, a Final Notice of Exercise/Assignments
> will be available in each CM's lockbox located at the NYMEX Clearing
> Department.  Each CM which has exercised or been assigned one or more
> options will receive a separate statement showing exercises and/or
> assignments for each option series.  Please check this statement
> carefully.  Although long options positions in-the-money by one tick or
> more will be automatically exercised, not all short option positions will
> be assigned if there are any options manually abandoned at such strike
> prices.  Please note that there also may be some at or out-of-the money
> options being exercised.
>
> E)	At approximately 8:00 PM, the final set of clearing sheets will be
> available in each CM's lockbox located at the NYMEX Clearing Department.
>
> It is strongly recommended that each CM have a representative(s) that is
> properly trained to handle the option expiration process available
> beginning at 3:15 PM and who will receive the CM's reports at the specific
> times.  It is solely the responsibility of the CM to review these reports
> and to notify the Clearing staff immediately of any discrepancies.
>
> To obtain the exact time of the availability for each report, clearing
> members should call (212) 301-4871, access code 701.  The announcement
> time will occur 1/2 hour prior to availability.
>
> Attached please find a Clearing Member Procedure Summary for ease of
> reference.  Please contact Anthony DiBenedetto at (212) 299-2152 or John
> Ramos at (212) 299-2142 if you have any questions.
>
>  <<OPTIEXPI(ShortndSchdl).xls>>

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