In this report
- New year, new record: Traders add WTI Weekly options to their portfolio
- Growing U.S. Crude Oil Grades futures volume continues into the new year
- Now live: Micro Henry Hub futures and options
- U.S. regains top spot as the largest LNG exporter
- On-screen Henry Hub Natural Gas options volume is breaking records
- Weather futures heat up, don't be left in the cold
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New year, new record: Traders add WTI Weekly options to their portfolio
2023 was the year for WTI Crude Oil Weekly options. Almost 9K unique traders across the globe traded a WTI Crude Oil Weekly option, up 17% to 2022. The launch of Monday and Wednesday WTI Weekly options helped to drive record volume and open interest, with participation up 44% to 2022 in Q4 alone.
This year the trend is continuing. January average daily volume (ADV) is on track to be the highest month at almost 20K contracts trading globally. Almost half of the volume is originating outside of the U.S., with 25% trading during non-U.S. hours.
WTI Weekly options allow traders to precisely manage volatility arising from weekend headline risk, OPEC+ meetings, unexpected weather events, cargo loading windows and mid-week announcements – with the added features of shorter expirations and lower premiums.
Growing U.S. Crude Oil Grades futures volume continues into the new year
Since WTI was added to the Dated Brent Index last June, participation in Gulf Coast crude oil grades has increased, with open interest reaching over 500K contracts, up 64% to 2022, and average daily volume (ADV) reaching a new record this quarter at 12K contracts. WTI Houston and WTI Midland, which trade as a differential to the benchmark WTI futures contract, offer the best liquidity for Gulf Coast price exposure.
Now live: Micro Henry Hub futures and options
Since launching on Nov. 6, Micro Henry Hub futures have traded over 324K contracts.. At 1/10 the size of the standard Henry Hub contract, the global benchmark for natural gas, Micro Henry Hub futures offer the ability to manage natural gas exposure with greater precision at a lower cost.
U.S. regains top spot as the largest LNG exporter
Trading activity in Henry Hub has historically been isolated to the U.S. market. However, the curtailment of Russian natural gas to Europe has brought higher flows of U.S. liquefied natural gas (LNG) into European markets. As a result, nearly 21% of Henry Hub Natural Gas futures are traded by European-based firms.
This fundamental change suggests a greater reliance on Henry Hub as the price reference for the international gas trade.
On-screen Henry Hub Natural Gas options volume is breaking records
CME Group, home to the most liquid natural gas market with 24-hour streaming liquidity in monthly and weekly options, saw a record 300K electronic Henry Hub Natural Gas options traded on screen on Jan. 9. This marks the highest volume since 2018 and reflects the recent jump in volatility due to winter weather across the U.S.
See why options traders choose CME Direct, the leading trading platform for Energy options volume.
Weather futures heat up, don't be left in the cold
Volume and open interest reached new heights in 2023, with average daily volume at 2K, up 261% from 2022, and average open interest at 135.6K, up 277% from 2022.
Weather futures and options are index-based products geared to average seasonal and monthly weather in 18 cities around the world – 13 in the U.S., four in Europe and one in Asia. We experienced the hottest year on record last year, with recent extreme snaps of cold across the Midwest. Our Weather complex enables traders to manage risks related to these temperature swings, as well as to global impacting climate events, like El Nino.
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