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Nasdaq's NFX Energy Derivatives Platform Goes Live

Making good on their March promise to launch a line of energy futures products by mid-year 2015, Nasdaq announced that its U.S.-based Nasdaq Futures Inc. (NFX) platform went live last Friday with an initial slate of futures and options on oil, natural gas and U.S. power benchmarks, with a fee holiday for the first nine months of trading.

“NFX was born out of strong customer demand and a confidence in Nasdaq’s ability to deliver an innovative technology solution,” said Hans-Ole Jochumsen, president of Nasdaq. “We truly believe that competition drives innovation, and that the energy futures market is ready for our more transparent pricing model.”

NFX is a designated contract market, powered by Genium INET technology, which features a transparent central limit order book, real-time trade reporting functionality, pre-trade risk management capabilities and allows for open, neutral access through proprietary order management systems, broker platforms and software vendors. All products will be cleared through The Options Clearing Corporation.

Back in March, when the exchange announced it was throwing its hat into the lucrative energy derivatives arena with veterans Intercontinental Exchange Inc. and CME Group (see Daily GPIMarch 11), Nasdaq said it had secured support from trading firms, inter-dealer brokers, and futures commission merchants to facilitate broad product distribution and early liquidity. Founding market participants include ABN AMRO Group, Advantage Futures, Goldman Sachs, JP Morgan, Morgan Stanley and Virtu Financial.

"We want to meet demand where the competition is lacking and deliver more value to customers at a significantly lower cost," said Magnus Haglind, vice president and head of U.S. Commodities for Nasdaq. "Competition in the futures market is long overdue, and NFX’s innovative clearing solution will allow us to pass operating efficiencies to our customers."

NFX is the newest platform in Nasdaq’s global derivatives business. The new energy product suite will be an extension of the current global commodities business, which offers trading and clearing solutions for assets including power, natural gas and carbon emission markets, tanker and dry cargo freight, fuel oil, seafood derivatives, iron ore, electricity certificates and clearing services.

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