Core Viewpoint - The Dalian Commodity Exchange (DCE) is set to optimize its options settlement price algorithm starting from July 22, 2025, by introducing the Stochastic Volatility Inspired (SVI) volatility curve fitting model to enhance the representativeness of option prices and improve market efficiency [1][2]. Group 1: Algorithm Optimization - The current settlement price calculation uses a uniform volatility model across different strike prices, which lacks precision in reflecting implied volatility [1]. - The new SVI model will fit implied volatility for different strike prices, creating a volatility curve that better captures the non-linear characteristics of option pricing [1][2]. Group 2: Market Impact and Implementation - Market participants view the integration of the SVI model as a significant step towards refined operations in the options market, enhancing price representativeness and accuracy [2]. - DCE has conducted over six months of internal testing and simulation, yielding positive results, and has prepared detailed business guidelines and market training to ensure smooth implementation [2]. Group 3: Future Outlook - Post-implementation, DCE will closely monitor market operations and dynamically assess the model's performance to continuously enhance the maturity and international competitiveness of the options market [2].

Core Viewpoint - The Dalian Commodity Exchange (DCE) is optimizing its options settlement price algorithm starting from July 22, 2025, by introducing the Stochastic Volatility Inspired (SVI) model to enhance price representativeness and market efficiency [1][2]. Group 1: Optimization Details - The optimization aims to address issues with the traditional settlement price calculation, which has a single volatility parameter and lacks representativeness [1]. - The SVI model will allow for a more refined representation of implied volatility across different strike prices within the same options series, creating a volatility curve for better settlement price calculations [1][2]. Group 2: Implementation and Testing - The SVI model is recognized globally as a key tool for constructing volatility smiles and is widely used in options pricing and risk management in mature markets [2]. - DCE has conducted internal testing and simulation for over six months, yielding positive results, and has prepared detailed business guidelines and market training to ensure smooth implementation [2]. Group 3: Market Impact - Market participants have acknowledged the positive impact of the optimized settlement price mechanism on price representativeness and accuracy, which is expected to enhance risk management quality and portfolio valuation accuracy [2]. - The DCE plans to closely monitor market operations post-implementation and dynamically assess the model's performance to continuously improve the maturity and international competitiveness of the options market [2].