Core Insights - The article discusses the rapid development opportunities for China's polysilicon industry due to increasing global demand for renewable energy, highlighting its position as a core product in the silicon industry chain and its applications in the photovoltaic and semiconductor industries [2] - The listing of polysilicon futures on December 26, 2024, provides upstream and downstream companies with effective risk management tools, facilitating reasonable profit distribution within the industry chain [2] - The case of Xinjiang Zhongsilicon Technology Co., Ltd. illustrates the application of out-of-the-money put options to manage inventory devaluation risks amid falling polysilicon prices [3][4] Industry Overview - Polysilicon is recognized as a key raw material in the photovoltaic industry and is considered a representative of green low-carbon technology [2] - China's polysilicon production capacity ranks first globally, but the industry faces challenges such as significant price fluctuations and concentrated capacity investments [2] Company Case Study - Xinjiang Zhongsilicon, located in a major polysilicon production area, faced risks of inventory devaluation due to falling prices and sought efficient risk management tools [3] - The company adopted a bear spread put option strategy to manage its inventory risks, which involved buying and selling put options at different strike prices [4][5] Risk Management Strategy - The bear spread put option strategy was structured with a buy option at a strike price of 40,000 CNY/ton and a sell option at 39,000 CNY/ton, resulting in a net premium payment of 3,016.17 CNY [5][6] - This strategy allows for a defined risk-reward framework, with maximum loss limited to the net premium paid and maximum profit achievable if the price falls below the lower strike price [8] Trading Execution and Monitoring - On the listing day of polysilicon futures, the PS2506 contract opened at 44,000 CNY/ton, and the company established its option positions based on market conditions [10] - A futures risk management company monitored price fluctuations and provided timely risk alerts and adjustment suggestions to ensure compliance and risk control [10] Direct Effects and Innovations - Xinjiang Zhongsilicon achieved a profit of 260.64 CNY/ton on the first day of options trading, successfully hedging against inventory devaluation risks [11] - The case represents an innovation in risk management tools, being one of the first applications of bear spread strategies in polysilicon inventory risk management [12] Industry Implications - The case highlights the importance of recognizing the value of derivative tools and encourages companies to adopt personalized risk management strategies [13] - The integration of futures and physical markets through out-of-the-money options provides new pathways for risk hedging in emerging industries like renewable energy [13] Promotion and Replication Value - This case enhances market awareness and acceptance of out-of-the-money options, encouraging more companies to engage in derivative trading, particularly in the rapidly developing green energy sector [14] - The bear spread put option strategy can be replicated in other sectors such as metals and chemicals, demonstrating its versatility [15] Conclusion - The integration of out-of-the-money options with the polysilicon industry supports stable operations and accelerates industry upgrades, contributing to the achievement of carbon neutrality goals [16][17]