any good links for the eletricity market? Some contracts trade on NYMEX...and I guess some on unregulated exchanges? any info appreciated.
Nymex Ends Open Outcry Electric Trades Feb 2.2000 Trying to bolster its sagging electric futures market, the New York Mercantile Exchange is planning to switch the venue for trading from open outcry in the pit to ACCESS, its electronic trading system. Nymex's electric futures market has suffered from a lack of liquidity from the start, and lately has seen lagging interest in electric futures, perhaps in part because of the volatility of physical electric markets. Nymex says it will switch to all-electronic trading on March 3. The exchange came up with its electronic trading system during the 1991 Gulf War to accommodate a demand for after-hours trading of crude oil, gasoline, and natural gas contracts. Nymex says it will waive the sign up fee for trading electricity on ACCESS. The exchange kicked off electric futures in March 1996 with great fanfare. The concept behind trading was that futures would mesh nicely with the emerging competitive markets for electricity, providing utilities and power marketers with risk hedging capability. But as competition has swept across the country, trading at the exchange, after some initially promising growth, has flagged. According to Nymex figures, electricity trading volume for 1999 totaled fewer than 200,000 contracts. By contrast, natural gas futures trading saw a 1999 volume of over 19 million contracts. Unleaded gasoline futures saw 8.7 million contracts traded in 1999. According to Nymex, trading in its two flagship electric futures contracts, the California-Oregon Border, and Palo Verde, has fallen dramatically in 1999. And its new offerings, Cinergy and Entergy, launched in 1998, and PJM, launched last March, have never drawn much attention. Cinergy trading averaged only 137 contracts a day in 1999 and Entergy only 104. PJM has seen miserable trading volume of only 13 contracts a day. Said an economist in the Midwest who has followed the Nymex venture in electricity trading, "I don't think moving to electronic trading is going to make much difference. There are just too few players, and too many other ways to hedge. Nor is there any effective way to benchmark electricity, which is now traded in so many places. And not nearly enough utilities have moved into hedging as an effective way to manage risk. There's still an attitude among many utilities that financial derivatives are shady and shaky. The gas industry is far, far ahead in this."
"Trying to bolster its sagging electric futures market, the New York Mercantile Exchange is planning to switch the venue for trading from open outcry in the pit to ACCESS, its electronic trading system." Enron to one side for now, but the gripe I had position trading all the NY futures markets was that they remain unelectronic. Powerful members in the pits probably do not want to give up their edge. Many of them were not fully operational after 11th Sep until a few days ago! As for ACCESS. What a laugh. That maybe computer based. However each order needs to be TYPED in by a bod. Calling your broker to see if your market order to sell has even been typed in yet has got to be one of the silliest tasks in 21st century trading.