The New York Mercantile Exchange (Nymex) stepped up the competition with IntercontinentalExchange (ICE), the energy industry’s most widely used electronic over-the-counter (OTC) energy trading platform, by announcing plans to introduce its own trading platform designed for the OTC energy market. The system begins beta testing this week and will be launched in January.

Nymex plans to offer contracts for the most commonly traded OTC energy products and provide trading sessions each weekday from 3:15 p.m. through 2:30 p.m. the following day and on Sunday starting at 7 p.m. and extending through 3:15 p.m. Monday, reflecting the trading hours for traditional Nymex futures and options markets.

“By offering the industry a platform that brings the neutrality, integrity, and expertise of the New York Mercantile Exchange to the OTC trading arena, alongside our existing OTC clearing and confirmation services, [Nymex] further expands the ability of OTC market participants to operate with the protection of the exchange, creating a true ‘one-stop shop’ for energy trading and risk management services,” said Exchange President J. Robert Collins, Jr. “With this latest service, we have taken yet another step closer to offering the energy industry the most efficient and comprehensive portal for price discovery and trade execution.”

In addition to the new trading platform, Nymex also is going to provide OTC traders with a “strategic linkage” to its clearinghouse through TradeCapture Inc., which will enable market participants to trade and clear Nymex contracts through TradeCapture’s well-established OTC trading platform. Nymex said it hopes to form alliances with other trading platforms in the marketplace, providing them with a clearing function.

“TradeCapture is the first of what we hope will be more alliances with existing platforms,” said Nymex spokeswoman Nachamah Jacobovits. “You’ll be able to execute trades on other platforms and clear it through our clearinghouse.”

Founded in 1997, TradeCapture is a global provider of web-enabled solutions for trading companies. Its flagship product is the ICTS Symphony which provides straight-through processing of commodities transactions. Its B2B Exchange Tools function as an “off the shelf” electronic exchange to trade physical commodities, futures and related derivative products. Together the two products provide a comprehensive front-end to back-end electronic solution for the commodities trading industry.

Nymex started offering clearing services of OTC energy products on May 31. On Nov. 15, it expanded its product offering from 25 to 57 natural gas, oil, power and other energy products. Nymex had offered the products for trading in the 90-minute electronic Access trading session, and there is currently open interest in 24 of the listed contracts. Its new platform will provide a much broader, interactive system, on which traders will be able to execute energy trades and have them cleared and completed.

“This is similar to what we had planned to do with eNymex [before the Sept. 11 terrorist attacks and the collapse of the technology markets caused a setback],” said Jacobovits. “The approach we took with eNymex would have had us put trading and clearing together.

“Originally what we launched [with the Channel 4 system that failed in the mid-1990s] was a trading system, but everyone said what they really wanted from Nymex was clearing. We answered that and planned to launch them together, but the platform we were going with at that time wasn’t going to be the right platform for the way we saw the industry evolving. We took a step back and introduced just clearing [of OTC products over the Access system]. Now we’ve developed a trade execution platform to go with it.”

To sign up for the Nymex trading platform, call (800) 438-8616. For more information on TradeCapture go to https://www.tradecapture.com/.

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