The New York Mercantile Exchange Inc. (Nymex) announced late Thursday that it intends to expand the open outcry trading hours for its energy futures and options contracts, a move that some say will help the earnings of pit traders who have lost volumes as well as profit to the electronic trading boom.
Opening times for crude oil futures and options, natural gas futures and options, heating oil futures and options, and gasoline futures and options markets would change to 9 a.m. from 10 a.m. EST beginning on Feb. 1. The close of the trading floor will remain 2:30 p.m. The crack spread markets and financially settled options markets will also adopt these new trading hours, the exchange said.
"We believe the expansion of open outcry trading hours will benefit market participants as a whole as the bulk of energy trading still occurs during trading floor hours," said Nymex CEO James E. Newsome.
Before the proposed change can become effective, it is subject to a consent process that includes a 15-day notice to the owners of class A memberships.
"I really am not surprised by the decision," said Tom Saal, a broker with Commercial Brokerage Corp. in Miami. "I think it is probably to allow floor trading operations the ability to make up for the lost volume that went to Globex. Open outcry is still viable, but I think they have lost a lot of volume to electronic trading. That extra hour is going to allow people who have floor operations to earn additional income."
Under a deal inked with the Chicago Mercantile Exchange (CME) in April, access to electronic trading of Nymex products is available "virtually 24 hours a day" on the CME Globex electronic trading platform (see Daily GPI, April 7). In late October, the traded volume on Globex of some Nymex energy contracts outpaced Nymex floor trading (see Daily GPI, Nov. 1).
Intelligence Press Inc. All rights reserved. The preceding news report
may not be republished or redistributed, in whole or in part, in any
form, without prior written consent of Intelligence Press, Inc.