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Options to Sell EU Carbon Exceed Those to Buy After Glut Plan

The volume of options to sell December European Union carbon allowances exceeded those to buy yesterday, after the regulator proposed Nov. 12 to temporarily delay 900 million metric tons of supply to fix a glut.

Traders yesterday bought and sold 4.2 million tons of options to sell, with strike prices ranging from 6 euros ($7.64) a ton to 8.50 euros a ton, according to data on cleared trades from ICE Futures Europe in London. Today, 250,000 tons of put options changed hands at a strike of 8 euros.

There were options to buy 2.1 million tons yesterday at strikes from 9 euros a ton to 12 euros, the ICE data show. Today, options to buy 250,000 at 9 euros changed hands. Trades handled by brokers are often cleared on ICE.

December futures have advanced 41 percent since reaching a record low in April, as the European Commission in Brussels seeks to fix a glut in supply.

The December carbon contract rose 0.5 percent today to 8.45 euros a ton on ICE at 9:46 a.m. It plunged 7.4 percent yesterday after surging 9 percent the day earlier, ahead of publication of the commission’s proposal.

Certified Emission Reductions for December gained 3 cents to 80 euro cents a ton today. CERs for December next year plunged 23 percent yesterday to a record 1.07 euros a ton and had not traded as of 9:46 a.m. today.

To contact the reporter on this story: Mathew Carr in London at m.carr@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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