CME adds YellowJacket weather derivatives data to settlement calculations

Source: YellowJacket

YellowJacket, the leading over-the-counter (OTC) energy derivative trading network and solution provider, announced its prices of off-exchange contracts traded or quoted over YellowJacket's OTC trade platform are now being incorporated into daily settlement price calculations for CME Group weather futures and options on futures contracts.

YellowJacket will provide CME Group with data, reflecting bids, offers and trades quoted on its peer-to-peer, private, bilateral trading platform, YJ ENERGY.

"YellowJacket is in a unique position to provide the market with truly comprehensive, accurate and anonymous pricing for weather contracts," said Jacob Pechenik, President and CEO, YellowJacket. "Now the market can leverage data and settlement prices that are reflective of all weather derivative market activity facilitated off-exchange. This will help firms increase the accuracy and effectiveness of trading strategies, analytics, portfolio management and more."

Specific benefits to the market include:
  • comprehensive pricing and benchmark data that is a true reflection of the market
  • greater accuracy in analytics and historical pricing databases
  • lower margin requirements, freeing up capital for trading and thereby increasing market liquidity
  • improved for portfolio management and Value-at-Risk

"Our clients can continue trading privately but now their activity will play a significant role in contributing to the settlement data the market benchmarks against," Pechenik added.

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