EPS, EFS and Block Trades: Using Off – Exchange Methods and ClearPort to Expand Strategy

EFP is a mechanism that allows an off-Exchange negotiated trade to be submitted to the Clearing House for clearing where the submitted EFP is one leg of a transaction involving a physical product delivery. An EFP may only be used where there is a related physical transaction, the Clearing House may ask for supporting documentation evidencing the related physical transaction.

NYMEX rules do not require an OTC broker to have a futures license to submit an EFP. An EFP is a versatile tool that allows traders to buy and sell physical crude or product of whatever quality, location or delivery method while using futures to manage the price. Please see the article for more information on terms, and to see by example how EFP can work, and how it is different from ADP. This is a partial list of products that can be submitted by EFP.

• DME Oman Crude Oil Futures (OQD) – Physically deliverable if position held on expiry.
• Brent Crude Oil Last Day Financial Futures (BZ) – expires 15 days before end of preceding month.
• Brent 25-Day (Platts) Futures (NBZ) – New expiry, expires 25 days before end of preceding month.
• Light Sweet Crude Oil (WTI) Futures (CL)