N.Y. Merc to Join Chicago in After-Hours Trading System
The New York Mercantile Exchange and the Chicago Mercantile Exchange said Thursday that they have reached an agreement in principle under which Nymex will become a partner in Globex, an after-hours trading system.
Globex is a global automated futures and options trading system being developed by the CME and Reuters that will enable traders to conduct business electronically after regular market hours.
The New York Merc is the first exchange to join the Chicago Mercantile as a partner in the Globex system, where it will be able to trade its energy futures and options contracts and platinum group metals contracts on a worldwide basis 24 hours a day.
The agreement will enable Nymex to list any or all of its energy futures and options contracts as well as its platinum group metals on the Globex system. Nymex’s 816 members will have access to the Chicago futures market in crop and livestock products as well as stock indexes, Treasury bills, foreign currencies and Eurodollars.
Like the CME, Nymex will list its products for trading on Globex only outside its regular trading hours. Globex will not interfere with or alter the “open outcry” transaction system used on both exchanges.
The new system will save both exchanges the expense of extending trading hours to coincide with futures market trading in Europe and Asia.
The expected Globex starting date for Nymex is in the first half of 1990. Some CME products are scheduled to begin trading on Globex in the second half of this year.
The agreement in principle approved by both governing boards is subject to approval by Nymex members by special vote on Jan. 26. The Commodity Futures Trading Commission is expected to give its official approval in February.
The agreement calls for Nymex to handle the clearing and settlement procedures and guarantee its own Globex products, just as the CME will for its Globex products. Reuters will operate the electronic trading network.
The Nymex agreement covers a 12 1/2-year term, which will run parallel with the CME-Reuters agreement already in place.
The plans should give the 116-year-old Nymex a competitive edge in the international oil futures market, said Rosemary McFadden, the exchange’s president.