With one week of trading under its belt, The Green Exchange (TGE), which offers a range of environmental futures and options contracts, reported “strong” trading in its initial slate of products, according to the exchange’s backers. Trade volume in TGE’s carbon contracts alone totaled 1.59 million metric tons, making it the most successful launch of exchange-traded carbon contracts.
Formed last December (see NGI, March 3; Dec. 17, 2007), the exchange offers a range of environmental futures, options and swap contracts for markets focused on solutions to climate change, renewable energy and other environmental challenges. The exchange was introduced by Nymex Holdings Inc. in partnership with Evolution Markets, Morgan Stanley, Credit Suisse, JPMorgan, Merrill Lynch, Tudor Investment, Constellation Energy, Vitol SA and RNK Capital.
At the close of the holiday-shortened week of trading (March 17-20) TGE reported the following volumes:
Nymex noted that each EUA contract is equal to 1,000 EUAs or 1,000 metric tons of carbon dioxide (CO2) equivalent. Each CER contract is equal to 1,000 EUAs or 1,000 metric tons of CO2 equivalent. Each SO2 contract is equal to 100 SO2 allowances. Each NOx contract is equal to 10 NOx allowances.
The first slate of environmental futures and options contracts was introduced on the New York Mercantile Exchange Inc. at 6 p.m. EST on March 16 for the trade date of March 17. The first transaction, which was for 25 CER futures contracts with December 2008 delivery, was logged shortly after the market opened.
“The strong launch of trading on The Green Exchange marks a significant milestone in global commodity trading,” said Richard Schaeffer, Nymex chairman. “The Green Exchange provides a broad slate of environmental products linked to Nymex’s global energy complex, which provides an unprecedented ability to manage risk and take positions in energy and environmental markets.”
Andrew Ertel, CEO of Evolution Markets Inc., added, “The Green Exchange opened strong during an initial week of trading under difficult circumstances on Wall Street. Despite uncertainty in the global financial sector and a holiday-shortened week, we were able to have the best opening week ever for a carbon exchange. We only expect the momentum to continue to build on the strength of its founding members.”
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