E-Mini Energy Futures

Discussion in 'Index Futures' started by freehouse, Feb 15, 2002.

  1. Press Releases
    Release Date: 02/14/02
    NYMEX, CME PARTNER TO OFFER E-MINI ENERGY FUTURES Cooperation Agreement Includes Cross-Access and Cross-Margining

    Nachamah Jacobovits Ellen G. Resnick
    New York Mercantile Exchange Inc. Chicago Mercantile Exchange Inc.
    212/299-430 312/930-3435
    njacobovits@nymex.com eresnick@cme.com

    NYMEX, CME PARTNER TO OFFER E-MINI ENERGY FUTURES Cooperation Agreement Includes Cross-Access and Cross-Margining

    NEW YORK and CHICAGO, Feb. 14, 2002 - The New York Mercantile Exchange, Inc. (NYMEX), and Chicago Mercantile Exchange Inc. (CME) today announced at a joint news conference in New York that they have reached a cooperative agreement to 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 will begin trading in the summer, officials of the exchanges said.

    The agreement calls for the two exchanges to launch smaller, electronically traded versions of NYMEX’s crude oil, natural gas, heating oil and gasoline futures contracts. Precious metals contracts may be introduced in subsequent phases. Modeled after CME’s popular line of E-mini stock index contracts, which are one-fifth the size of the standard-sized contracts, the new E-mini energy and precious metals futures would be a to-be-determined fraction of the size of the standard-sized NYMEX contracts.

    Under the cross-access program, CME members will be granted access to GLOBEX to trade the E-mini versions of the energy futures products and to NYMEX ACCESSâ to trade NYMEX Division products listed on that system, subject to the guarantee of a NYMEX clearing firm. CME members who are not members of NYMEX will receive discounts for these trades. Similarly, NYMEX members will receive access to GLOBEX and discounts on fees for CME products traded on GLOBEX with a CME member firm guarantee, and for the E-mini energy products with the guarantee of a NYMEX clearing firm.

    The Exchange officials said that a cross-margining program will provide capital efficiencies for market professionals and proprietary accounts by combining the positions at joint or affiliated clearing members in baskets of CME and NYMEX or COMEX Division commodities, the new E-mini energy products, and GSCIâ futures and options into a single portfolio. The risk-based performance bond (margining) systems of each clearing organization will then determine a single performance bond requirement across both markets.

    Vincent Viola, NYMEX Chairman, said, “This deal will bring our successful energy products to a broad retail user base through the GLOBEX distribution network, as well as expand the opportunities and cost efficiencies for participants in both markets.”

    “This is an innovative new development in the futures industry that builds on the long-standing relationship between our exchanges,” said CME Chairman Scott Gordon. “With this cooperation agreement, we are blending CME’s successful E-mini concept, our GLOBEX infrastructure and global distribution network with NYMEX’s proven product line, established liquidity and customer relationships in these markets.”

    NYMEX President J. Robert Collins, Jr., said, “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.”

    “Tremendous synergy has been developed between the open outcry and electronic trading in our stock index markets since CME first introduced the E-mini S&P 500 futures contract in 1997 and the E-mini Nasdaq-100 contract in 1999,” said CME President and Chief Executive Officer Jim McNulty. “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.”

    Unlike their standard-sized counterparts, the new E-mini products will be cash-settled to the respective NYMEX futures contract month final settlement price on the last day of trading. Two contract months will trade at any given time.

    GLOBEX is an open access electronic trading platform that displays the “book” to any qualified market participant with the ability to route orders to the system. The book represents the ability to view bids and offers in the market. Under the agreement, market participants interested in trading the new products will be designated “qualified” if they are guaranteed by a NYMEX clearing member firm. In addition, NYMEX members and customers trading the new products on GLOBEX will have access to CME’s electronically traded products, subject to the guarantee of a CME clearing firm.

    In addition to the extensive distribution network and connectivity alternatives of GLOBEX, the exchanges will work together to provide NYMEX members and customers with access to GLOBEX, both on the NYMEX trading floor and around the world. Points of access will include GLOBEX TraderSM-Direct terminals placed on the NYMEX trading floor adjacent to the pit, enhancing liquidity and providing trading opportunities similar to CME’s E-mini equity index complex on its trading floor.

    NYMEX and CME jointly developed CLEARING 21â, the clearing platform operated at both exchanges for high-volume, high-capacity clearing and settlement of exchange-based transactions. The system processes reported trades and tracks positions continuously in real time, providing users with instantaneous information on trades, positions and risk exposure.

    The New York Mercantile Exchange, Inc., (www.nymex.com) is a subsidiary of NYMEX Holdings, Inc. The Exchange is the world's largest physical commodities exchange, and the preeminent global trading forum for energy, and metals.. Products include crude oil, heating oil, gasoline, natural gas, platinum, gold, silver, copper, and aluminum futures and options; propane, coal, electricity, and palladium futures; and options on the spreads between crude oil and heating oil and crude oil and gasoline. In 2001, its trading volume totaled more than 103 million contracts, with a notional value of approximately $3.2 trillion. Overall Exchange volume year-to-date is up 26 percent.

    Chicago Mercantile Exchange Inc. (www.cme.com) is the largest futures exchange in the United States. As an international marketplace, CME brings together buyers and sellers on its trading floors and GLOBEX around-the-clock electronic trading platform. CME offers futures contracts and options on futures primarily in four product areas: interest rates, stock indexes, foreign exchange and commodities. CME pioneered the E-mini concept with the September 1997 launch of E-mini S&P 500 futures and options. The exchange followed up in 1999 with E-mini Nasdaq-100 futures. The two stock index futures contracts quickly became the fastest-growing products in CME history. The exchange moves about $1.5 billion per day in settlement payments and manages $28.2 billion in collateral deposits. CME is a wholly owned subsidiary of Chicago Mercantile Exchange Holdings Inc.


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    CME, GLOBEX, CLEARING 21 and GLOBEX Trader are trademarks of Chicago Mercantile Exchange, Inc. Standard & Poor's®, S&P®, S&P 500®, Standard & Poor's 500, and 500 are trademarks of The McGraw-Hill Companies, Inc. Nasdaq and Nasdaq-100 Index are trademarks of The Nasdaq Stock Market, Inc. GSCI is a trademark of Goldman Sachs & Co. These trademarks are used herein under license.

    The New York Mercantile Exchange, Inc., has attempted, wherever possible, to make statements in good faith , as of the date of this release, by using words such as anticipate, believes, expects, and words and terms of similar substance in connection with any discussion of its present and future operations within the industry. Any forward-looking statements made by, or on behalf of the Exchange, involve a number of risks, trends, uncertainties, and other factors which may cause actual results to differ materially, including the Exchange’s receipt of the necessary Commodity Futures Trading Commission approval; timely performance and cooperative effort of exchange partners; and changes in financial or business conditions at the Exchange.
  2. dozu888


    another step in the right direction.... it's about time.... energies have the 2nd best trends after currencies... we'll see what happens.