Nymex and CME create E-mini energy contracts

Nymex and CME create E-mini energy contracts

The New York Mercantile Exchange (Nymex) and Chicago Mercantile Exchange (CME) are to jointly offer newly-created 'E-mini' versions of key Nymex energy futures contracts for trading on CME's Globex electronic trading platform and clearing at the Nymex Clearing House.

The first E-mini energy contracts, involving smaller, electronically traded versions of Nymex crued oil, natural gas, heating oil and gasoline futures contracts, will begin trading in the summer. Precious metals contracts may be introduced in subsequent phases.

Jim McNulty, CME president and chief executive officer, says: "By expanding Globex distribution to the Nymex floor and leveraging our existing distribution channels, we hope to build on our previous success, enhance market liquidity and expand the customer base for energy and, potentially, metals futures."

The exchanges are also introducing a cross-margining programme, designed to offer capital efficiencies by combining positions at joint or affiliated clearing members into a single portfolio. The risk-based performance bond (margining) systems of each clearing organisation will then determine a single performance bond requirement across both markets.

Nymex president Robert Collins, notes: "In 2002, we have seen a 64% increase in natural gas futures over the same period last year, as well as a 20% increase in overall energy futures trading. By reducing the size of the contract unit, we hope to emulate the CME's success in expanding the trading community for our most liquid markets."

Comments: (0)