The New York Mercantile Exchange Inc. (Nymex) announced Tuesday that it will offer implied pricing functionality for energy futures contracts traded on the Chicago Mercantile Exchange (CME) Globex electronic trading platform beginning on July 16 for trade date July 17.
Nymex explained that implied pricing on the CME Globex platform integrates bids and offers, in spreads and their underlying contracts, to generate additional liquidity and provide the best possible prices.
“Nymex and CME have combined their strengths to provide innovative trading solutions to the energy industry,” said Nymex Chairman Richard Schaeffer.
Nymex CEO James E. Newsome added, “Nymex strives to give the customers the broadest array of options for mitigating credit risk, using their preferred method of trading, whether open outcry or electronic, virtually 24 hours a day.”
The announcement Tuesday marks the one-month anniversary of Nymex energy products being offered on the CME Globex electronic trading platform (see Daily GPI, June 12). Nymex said late last month that despite small volumes on a number of the electronically traded contracts, the company has seen early growth (see Daily GPI, June 26).
“The implied spread trading functionality on CME Globex will further augment the electronic trading environment of Nymex’s benchmark energy futures, ultimately adding to the liquidity of these electronic markets,” said CME Chairman Terry Duffy.
CME CEO Craig Donohue outlined some of the Nymex volume figures seen on Globex. “Since the launch of Nymex products on the CME Globex platform on June 12, average daily volume has been 78,000 contracts, reaching a daily high of 108,000 on June 21,” he said. “We believe this new spread trading functionality will help to expand the growth of energy trading electronically.”
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