Using Shortcuts to Enter Specific Strikes

Besides manually entering an option’s strike, you can also enter it automatically using keyboard shortcuts. That is, you tell SDX Commodities & Energy what sort of strike you want and SDX Commodities & Energy works out what the actual strike should be.

To automatically enter the strike:

For an ATMS option (where the strike is the same as the current underlying, i.e., the spot for an OTC commodity, the nearby contract for exchange-traded commodities, and the day ahead price for electricity, etc.), enter either of the following:

s, atms

For an ATMF option (where the strike for an exchange traded commodity is the future value, the strike for an OTC commodity is the underlying swap value, and the strike for an Asian or swaption is also the underlying swap value) enter any of the following:

atm, f, atmf

However, it is important to note that:

For a strip the average of the future or underlying swap values of the underlying instruments is taken.

For a precious metal commodity, you should only use f or atmf if you want an ATMF option. Using atm for such a commodity will give you an “at the money delta neutral” straddle (according to the default market convention for precious metals).

For a zero cost strategy, see Creating a Zero Cost Strategy.

That is a certain percentage of the forward price, enter the amount and a % sign, for example, 105% or 80%.

For some assets the forward price is displayed as the forward and for some this is displayed as the underlying swap price. So for Brent Crude Oil entering 105% will give you a strike equal to 1.05 x the forward price; for Capesize 4 TC entering 80% will give you a strike equal to 0.8 x the underlying swap price.

This is the case for all assets with the exception of the precious metals. For the precious metals, when you enter an amount and a % sign the system calculates the strike as the defined % of the spot.

That will result in a particular delta forward value, in the Strike field enter the required delta forward value as a percentage followed by the letter d or the word delta. For example, to specify that you want SDX Commodities & Energy to select the strike that will result in a delta forward value of 25%, enter 25d or 25 delta.

For more information, see Specifying the Strike in Terms of Delta.

For an “at the money delta neutral” straddle enter the following:

atmdn

For a precious metal commodity only, you can also use the following shortcut to get the strike that will give you an “at the money delta neutral” straddle (in accordance with the default market convention for precious metals):

ATM