This is the value, as at the relevant date, of commodities (excluding gold) options, as determined in accordance with relevant prudential standards.A commodities contract is any contract that transfers the commodity price risk of an underlying asset from one party to another.An option provides the purchasing entity with the right but not the obligation to buy or sell a specific amount of the underlying asset at a pre-agreed price, on or before a specific future date. 

The capital charge on this item is the maximum loss figure obtained from the scenario matrix constructed for each commodity (refer to APS 116).

Maximum loss is calculated by specifying a fixed range of changes in the option portfolio's risk factors (i.e. underlying price and volatility) and calculating changes in the value of the option portfolio at various points along this matrix. The maximum loss is determined as being the largest loss within the matrix.