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Nymex Unveils 3-2-1 Plus Energy Index Futures Contract

Adding to a busy week for the New York Mercantile Exchange (Nymex) that included new product offerings (see Daily GPI, Dec. 21) and accusations of merger interference (see Daily GPI, Dec. 22), as well as grumblings surrounding its scaled-down 2007 holiday schedule (see Daily GPI, Dec.21), the exchange reported Thursday that it will launch its first energy index futures contract, 3-2-1 Plus as part of the Nymex iPort suite of index futures contracts beginning on Jan. 21 for trade date Jan. 22.

On Wednesday, Nymex unveiled Nymex iPort, a suite of energy and metals index futures contracts. Nymex iPort products will allow investors to hedge in the Nymex and Commodity Exchange Inc. (Comex) markets using futures indexes.

Nymex said the index products will offer broad sector coverage in a single price and a single trading vehicle. Nymex iPort contracts will be available for trading on the Nymex trading floor and the Chicago mercantile Exchange's Globex electronic trading platform and for exchange of futures for swaps (EFS) transactions on Nymex ClearPort.

"We believe these contracts will serve as an additional risk management tool for our current customers and as an innovative way to enter the energy markets for new customers," said Nymex CEO James E. Newsome.

In its Thursday update, Nymex said the 3-2-1 Plus futures contract will enable traders to manage risk across their energy portfolios with a single contract. The contract, which will have the code WX, will be cash-settled and composed of the core Nymex energy futures contracts, light sweet crude oil, RBOB gasoline, heating oil, and natural gas ratios of 3:2:1:1, respectively, divided by a factor of 10 to obtain the index value.

Nymex said it will list the contract for six consecutive months beginning with the March 2007 contract. They will trade from 10:00 a.m. to 2:30 p.m. on the Nymex trading floor; and on CME Globex from 6:00 p.m. Sunday through 5:15 p.m. Friday New York time, with a 45-minute break between 5:15 p.m. and 6:00 p.m. on Mondays through Thursdays.

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