NYMEX Holdings, Inc., parent company of the physical futures exchange, and the Chicago Mercantile Exchange have signed a definitive technology services agreement under which CME will become the exclusive electronic trading services provider for NYMEX’s energy futures and options contracts.
Access to electronic trading of NYMEX products will be available virtually 24 hours a day on the CME Globex(R) electronic trading platform.
“This agreement establishes the most robust and liquid energy trading model in the world,” said James E. Newsome, President and Chief Executive Officer of NYMEX. “Listing our energy contracts on the CME Globex platform enables us to dramatically increase our distribution much more quickly than we could have by building our own capability. This agreement will complement and enhance our open outcry trading, expand the accessibility of our benchmark energy contracts to investors worldwide and allow us to build on the record electronic trading volumes we have been experiencing.”
Initial trading of NYMEX energy products on CME Globex, currently scheduled to begin in the second quarter of 2006, is expected to include side- by-side trading of NYMEX standard-sized and NYMEX miNY(TM) energy futures contracts for crude oil, natural gas, heating oil and gasoline with NYMEX’s floor-based products during open outcry trading hours and when the NYMEX trading floor is closed.
In the third quarter, all products trading on NYMEX ACCESS(R), the exchange’s after hours electronic trading platform, are expected to transition to CME Globex, which will be the exclusive electronic trading platform for metals products currently listed on the COMEX Division, with an anticipated third quarter launch.
All NYMEX contracts traded on CME Globex will be cleared by the NYMEX clearinghouse. In addition to NYMEX liquidity providers, a specified number of CME market makers will be designated by CME to build electronic liquidity at NYMEX member rates. Additional terms of the agreement were not disclosed.
“Outsourcing the electronic trading of our energy futures contracts to CME will ensure that we continue to meet the needs of our customers while providing additional liquidity to our open outcry trading platform,” said Mitchell Steinhause, Chairman of NYMEX. “We have had a successful relationship with CME over the years, and we are pleased that we will be able to continue to work together to provide the most efficient and accessible energy futures exchange in the world.”