FRE 6431s Project


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Intro about NYMEX for class

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  • Intro
  • FRE 6431s Project

    1. 1. FRE 6431 Prof: Roy Freedman “ NYMEX”
    2. 2. The New York Mercantile Exchange “NYMEX” <ul><li>(NYMEX) is the world's largest physical commodity futures exchange, located in New York City. </li></ul><ul><li>NYMEX & the New York Commodities Exchange (COMEX), which were independent companies but are now merged. </li></ul>
    3. 3. Cont.. <ul><li>NYMEX Holdings listed on NYSE on November 17, 2006, under the ticker symbol NMX. </li></ul><ul><li>NYMEX handles billions of $’s worth of energy products, metals, and other commodities being bought and sold on the trading floor and the overnight electronic trading computer systems. </li></ul><ul><li>CFTC regulates the floor of the NYMEX. </li></ul>
    4. 4. Commodities on NYMEX <ul><ul><ul><li> Crude oil </li></ul></ul></ul><ul><ul><ul><li> Gasoline </li></ul></ul></ul><ul><ul><ul><li> Gold </li></ul></ul></ul><ul><ul><ul><li> Heating oil </li></ul></ul></ul><ul><ul><ul><li> Natural gas </li></ul></ul></ul><ul><ul><ul><li> Platinum </li></ul></ul></ul><ul><ul><ul><li> Silver </li></ul></ul></ul>
    5. 5. N Y MEX Commodities Sympol QG ON NG Natural Gas QM LO CL Crude Oil MiNY Options Futures Commodity
    6. 6. COMEX Commodities Sympol QI SO SI Silver QO OG GC GOLD MiNY Options Futures Commodity
    7. 7. Crit eria of Futures Contract: <ul><li>1- Commodity </li></ul><ul><li>2- Quantity </li></ul><ul><li>3- Quality </li></ul><ul><li>4- Month of Delivery </li></ul><ul><li>5- Place of Delivery </li></ul><ul><li>NOTE: NYMEX insures that each contract meets the above criteria. </li></ul>
    8. 8. Trading Hours <ul><li>1- Trading floor: </li></ul><ul><li>From 9.00 AM to 2.30 PM </li></ul><ul><li>2- GLOBEX System: </li></ul><ul><li>From 6.00 PM to 5.15 PM (next trading day). </li></ul><ul><li>NOTE: 45 minutes break everyday. </li></ul>
    9. 9. Type of traders: <ul><li>Out rights: A one legged, single sided trade. </li></ul><ul><li>Spreads: an action of selling one contract and buying another one. </li></ul><ul><li>Strip: buying or selling the same commodity for 72 month combination. </li></ul>
    10. 10. Wh o are the clerk? <ul><li>Clerks are staffs in the exchange who facilitate trades to be made. </li></ul><ul><li>Phone clerk: takes orders from brokerage firms. </li></ul><ul><li>Screen clerk: Checks or enters broker’s trades. </li></ul><ul><li>Runner: Moves order tickets on floor. </li></ul><ul><li>Point Clerk: Quotes futures market for options trades. </li></ul>
    11. 11. the Floor-Open outcry <ul><li>Rules of open outcry: </li></ul><ul><li>There must be at least three traders present. </li></ul><ul><li>All trading must take place during set trading hours. </li></ul><ul><li>The highest bid and lowest offer must be recognized at all times. </li></ul>
    12. 12. Trade Reporting System <ul><li>1- The buy and sell traders fill in the trade data on their trading cards. </li></ul><ul><li>2- Within one minute after the trade, the sell trader tosses a sell card into the ring. </li></ul><ul><li>3- NYMEX employees time stamp the cards. </li></ul><ul><li>4- A runner carries the cards to the chute which sends them down to data entry. </li></ul><ul><li>5- Data entry then enters the trades into the trading management system (TMS) </li></ul>
    13. 13. Pri ce Trading System <ul><li>1- When a trade is made, the trader must insure that a price reporter records the month and the price. </li></ul><ul><li>2- The price reporters stand in the ring and record the trade data on hand held. </li></ul><ul><li>3- the data is transmitted through wireless technology and displayed on the wallboard. </li></ul><ul><li>4- the data goes out on the ticker where it is picked up by vendors and transmitted their clients. </li></ul>
    14. 14. CME Electronic Trading
    15. 15. References: <ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li>Mr Jang and Mr Liao’s Project on NEMEX 2007 </li></ul><ul><li> </li></ul><ul><li> </li></ul>