Where is this stuff trading?

Discussion in 'Commodity Futures' started by Iceman14, Apr 30, 2007.

  1. Iceman14


    Am I missing something? I'm well aware that most of the NYMEX futures are now trading on Globex and the NYMEX website confirms this, noting that nearly 600,000 contracts traded on Globex today (4/30) and 235,000 traded on the floor. This has been the trend for the past several months.

    Maybe its because I'm trying to access free data, but everytime on log on to see the free quotes on nymexoncmeglobex.com, the product volume for even the full-size, physically-settled crude contracts only runs in the low thousands (i.e 2000-4000). The others, natural gas, RBOB, heating oil usually only show hundreds of contracts traded. I'm assuming this is a daily total.

    Where is all this volume that both NYMEX and the CME keeping boasting about? Where can I find more accurate daily volume numbers, or am I not understading something?


    Perhaps the numbers you are seeing aren't updated, honestly I don't know, but the figures are roughly 80% of the volume is done on CME Globex and the remaining 20% or so is done in the pit, primarily spreads and back months. An interesting note is that the uranium contract that begins trading Sunday is supposed to trade on the NYMEX's new electronic system (can't recall the name of it), suggesting that over time they may be planning to switch the rest of their products from Globex over to this new platform as well. Here were the breakdowns in volume (courtesy of CITI) for last Friday:

    Final trading volumes on physically-settled NYMEX contracts for Friday,
    April 27:

    Globex Open Outcry Total Globex % of
    Crude Oil 295,861 65,540 361,401 82%
    Heating Oil 53,979 13,025 67,004 81%
    RBOB 71,636 21,989 93,625 77%
    Natural Gas 81,004 12,589 93,593 87% **

    ** New records.

    The Intercontinental Exchange (ICE) also traded crude oil futures as

    WTI Futures 163,059 = 31% of WTI total
    Brent 231,647
  3. Back to Clearport?

    I remember before the move to Globex I was getting all sorts of delays intra-day from the Clearport platform.

    No more globex?


    Well I stand corrected, the UX future will trade on the Globex platform and will also be available on Clearport. I spoke with NYMEX Marketing yesterday and was informed that the NY Post article that stated otherwise (link below) was incorrect and that the Uranium will be trading on Globex and will also be available on Clearport.


    The antiquated system that the NYMEX used to use for electronic trading was called the NYMEX ACCESS system, which did not take stop orders or OCO's, and so when the NYMEX decided to go mainstream with their products on the screen that is why they turned to the CME and partnered with them in order for their products to be able to trade on the more sophisticated Globex platform. The Clearport platform is not something the general public would use, unless you are a broker or a trader who just so happens to input their own OTC trades on behalf of the broker, so my thinking is that you may be referring to the ACCESS system...
  5. Iceman14


    Cool, thanks for the info. Those numbers are way different than what I've seen on the free CME website. Maybe nobody bothers updating it, or some program/code is busted.

    Just curious, how deep are those markets on the screen? What's the average size on the bid/offer? 10, 20, 100 lots???

    Also, as far as NMYEX on GLOBEX is concerned, I read in my friend's CME member magazine that NYMEX signed a 10-year deal to list their contracts, with options coming soon, on GLOBEX. Not sure if this means a formal merger between the two is inevitable or what. And I'm not sure how tight the NYMEX/CME agreement is...just passing along my two cents.

    Anybody know what the futures pits at the NYMEX look like now? I know the Treasury pits at the CBOT are dead, and with the exception of the back-months and options at the Merc, the Eurodollar pits are dead too. The CBOT grains pits are starting to thin out too, though there is still decent volume in there.


    Not sure why the volume isn't accurate on their site (haven't checked it), but if it's wrong it's not the only place that lists bunk data. As far as size in the energies on the screen, they are all very liquid throughout the regular session and crude has pretty good volume all of the time. Tough to say exactly how much, but the spread is usually a penny, never more than 2 or 3, and there is usually anywhere from 1-50 lots at each price level (I'd say an average of 25ish and sometimes there are several hundred). Natural is not quite as active, but usually there are anywhere from 1 to 25 lots, sometimes 50 or 100, and every once in a while several hundred. Actually this morning before we went up to 8.105 I saw someone sell 500 lots at 7.98 which is the most I have ever seen in natty. The spread there is anywhere from 1 to 5 or 6 ticks during the day, but it doesn't trade all that much overnight, while crude does. I don't trade products so I don't watch them as much, but I think 5's and 10's are common, sometimes 20's and the spread is usually 10 to 30 pts.

    As for the NYMEX on Globex deal, I think that is actually going to last regardless of any formal merger/partnership, and yes, options are supposed to come on the screen sometime this summer, maybe as early as the end of June. While a merger may be imminent, the only way I can see it right now is if the ICE manages to beat out the CME for the CBOT acquisition...if not, I think they stay as they are.

    Finally, on the pits issue I think it is getting more and more dead by the day. The last time I was there at the beginning of the year it was already markedly different than the last time I had been there which was a week or so before the NYMEX Launched their products on Globex. The difference was huge and unfortunately a lot of the guys down there are closing up shop and moving on. The ones I talk to who are still there constantly comment on how dead it is and oftentimes say that they are bored which was never the case before. The scalping game is over for now, and while guys still go in to trade and there is still business in back months and spreads for the major players, the future isn't so bright. The options pit is still the only place to trade options, so they're still busy, and should remain so for a time even after the options go on the screen, as I can't see the major players going solely to the screen right away...that transition may take time. For the speculators and smaller hedgers though, I think electronic options will be a great thing.

    Does anyone know why they say it will be so hard for commodity options to transition to the screen when it has worked so well for equities? Is it just a volume issue??...
  7. Iceman14


    Thanks for the insight, PJK. I've wondered what the hold up is in commodity options as well. I think it has a lot to do with liquidity; I don't think it's a complexity issue.

    I got my start in the bond options pits at the CBOT, and while I don't trade that market any more, I still keep tabs about what's going on down there and I still have a few friends on the floor. No need to say the futures pits are literally ghost towns (who knew vol. could below zero??). But volume has started to come off in the pits as well.

    On any given day now, electronically-traded 5 and 30 year options can make up 50-70% of the total volume in those contracts. Even in the benchmark 10-year, I am seeing 40-50% of total volume trade electronically. When I was down there 2 years ago, it was unheard of to see more that 10-15% of total volume on the screen. Back then, 100 lots on the screen were considered size; now, 2000+ lots trade regularly. It's taken a while to reach these current levels, but I think the pace of the increase in electronic volume is growing exponentially.

    With commodity options, I doubt that the strategies are any more complex than financial options strategies. The butterflies, put/call flies, straddles, strangles that trade in those pits are fairly easily replicated on the screen nowadays. I think it must be a liquidity issue. But as smaller speculators like myself begin utilizing the screen more, volume will follow, and some market-makers may chose to follow as well, for now.

    Interesting article I found from Reuters that shows that even some floor brokers know the change is imminent.

  8. I am also waiting with anticipation the online trading of Oil Complex options.
    I wonder if it makes a difference in gearing up for electronic trading of options that the price structure in the oil complex is not linear.

    In bonds or indices any MM can whip up a quote on a butterfly or other complex order but try to come up with one on NG or CL.

    One would expect that the bid/ask spreads would be wide. I also expect that eventually it would be a more efficient market, taking away another edge of the floor trader.



    Yeah they won't be able to take us for a ride on the way in and the way out anymore like has been the practice up to now. I'm sure the bid/offer will indeed be wide on the screen, but I loathe the options market makers so much that it will be nice to be able to execute for oneself, and to do it when you want to, not one some market maker gets around to quoting it. Sunday June 24th is the date the options go live...I can hardly wait.
    #10     May 15, 2007