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Nymex Lowers Natural Gas Futures-Related Margins Again

After raising its natural gas futures related margins five times in a month to deal with escalating prices (see NGI, Sept 26), the New York Mercantile Exchange Inc. (Nymex) said last week that it was decreasing those very same margins for the second time in two weeks (see NGI, Oct. 10).

The margins affected include natural gas futures, Henry Hub swap futures, Nymex miNYsm natural gas futures, Henry Hub swing swap futures, and Henry Hub penultimate swap futures contracts. The decreases go into affect at the close of business on Tuesday.

Margins on the first month of the natural gas futures contract will decrease to $11,000 from $13,000 for clearing members; to $12,100 from $14,300 for members; and to $14,850 from $17,550 for customers. The margins on the second month will decrease to $12,000 from $14,000 for clearing members; to $13,200 from $15,400 for members; and to $16,200 from $18,900 for customers. Margins on the third month will decrease to $12,500 from $14,500 for clearing members; to $13,750 from $15,950 for members; and to $16,875 from $19,575 for customers. The margins on the fourth and fifth months will decrease to $13,000 from $14,000 for clearing members; to $14,300 from $15,400 for members; and to $17,550 from $18,900 for customers. Margins on all other months will remain unchanged.

The margins on the first month of the Henry Hub swap and Henry Hub penultimate swap futures contracts will decrease to $2,750 from $3,250 for clearing members; to $3,025 from $3,575 for members; and to $3,713 from $4,388 for customers. The margins on the second month will decrease to $3,000 from $3,500 for clearing members; to $3,300 from $3,850 for members; and to $4,050 from $4,725 for customers. Margins on the third month will decrease to $3,125 from $3,625 for clearing members; to $3,438 from $3,988 for members; and to $4,219 from $4,894 for customers. The margins on the fourth and fifth months will decrease to $3,250 from $3,500 for clearing members; to $3,575 from $3,850 for members; and to $4,388 from $4,894 for customers. Margins on all other months will remain unchanged.

Margins on the first month of the Nymex miNYsm natural gas futures contract will decrease to $5,500 from $6,500 for clearing members; to $6,050 from $7,150 for members; and to $7,425 from $8,775 for customers. Margins for the second month will decrease to $6,000 from $7,000 for clearing members; to $6,600 from $7,700 for members; and to $8,100 from $9,450 for customers.

Margins on the Henry Hub swing swap futures contract will decrease to $2,750 from $3,250 for clearing members; to $3,025 from $3,575 for members; and to $3,713 from $4,388 for customers.

The exchange also said last week that two seats on the Nymex Division set records in consecutive days. On Thursday, a seat sold for $3 million, surpassing the $2.85 million record sale set on September 27 (see NGI, Oct. 3) On Friday, a seat sold for $3.1 million, the most ever for a seat on any futures exchange. Ownership of a seat on the Nymex Division also represents a share of common stock in Nymex Holdings Inc.

"It is a dynamic time for the exchange and its markets, and we have seen unprecedented growth in volumes as we have continued to meet the evolving risk management needs of the industry," said Nymex President James E. Newsome.

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