06/05/2006
CONTRACT INFORMATION
Q: What are the NYMEX "side-by-side" electronic energy futures contracts that will be listed on CME Globex® commencing on the evening of June 11 for the June 12 trading session (Day One)?
A: NYMEX will offer five financially settled futures contracts to trade on the CME Globex® electronic trading system. Four of the contracts will settle on the penultimate (next to last) trading day of the spot month: Crude oil (WS), heating oil (BH), gasoline (RT), and natural gas (HP). A second natural gas futures contract will terminate on the last day of trading of the spot month (HH).
Q: What are the trading hours for the new contracts and how do they compare to the floor-traded contracts?
A: As of the Day One launch, the following trading hours will be in effect for all listed contracts as follows (all times are New York time):
Hours |
Physical |
Financial |
Last Day |
Penultimate |
|
| Floor-Traded Contracts | Monday to Friday |
||||
| Crude Oil (CL) | 10:00 AM to 2:30 PM |
X |
X |
||
| Natural Gas (NG) | 10:00 AM to 2:30 PM |
X |
X |
||
| Heating Oil (HO) | 10:05 AM to 2:30 PM |
X |
X |
||
| Gasoline (RB) | 10:05 AM to 2:30 PM |
X |
X |
||
| Electronic-only contracts – CME Globex | Monday to Friday |
||||
| WS | 6:00 PM to 5:15 PM |
X |
X |
||
| HH | 6:00 PM to 5:15 PM |
X |
X |
||
| HP | 6:00 PM to 5:15 PM |
X |
X |
||
| RT | 6:00 PM to 5:15 PM |
X |
X |
||
| BH | 6:00 PM to 5:15 PM |
X |
X |
||
| NYMEX ACCESS® Note: NYMEX ACCESS will now open at 6:00 PM Sundays rather than 7:00 PM, and will close at 5:15 PM on Fridays rather than 5:00 PM. CL, NG, HO, RB |
6:00 PM Sundays to 9:50 AM Mondays. 3:15 PM to 9:50 AM, Mondays through Thursdays. 3:15 PM to 5:15 PM, Fridays. |
X |
X |
||
| NYMEX miNY™ – CME Globex | Monday to Friday |
||||
| Crude Oil (QM) | 6:00 PM to 5:15 PM |
X |
X |
||
| Natural Gas (QG) | 6:00 PM to 5:15 PM |
X |
X |
||
| Heating Oil (QH) | 6:00 PM to 5:15 PM |
X |
X |
||
| Gasoline (QU) | 6:00 PM to 5:15 PM |
X |
X |
||
| NYMEX ClearPort® Trading and submission of off-exchange transactions for clearing |
Monday to Friday 6:00 PM to 5:15 PM |
X |
X |
Q: How will the new contracts be settled each day? A: All of the NYMEX contracts listed on CME Globex on Day One will be settled, on a daily and on a final basis, on the settlement prices for the physically settled contracts offered by NYMEX in the same underlying commodity.
Q: Is it possible to get a different bid/ask on the floor vs. the electronic screen?
A: Prices are likely to be different because the floor-traded and electronically traded contracts represent two different slates trading in two separate venues.
Q: How many months will be listed for the new regular-sized financially settled contracts?
A: The full curve will be listed on Day One: 72 months for crude oil and natural gas, 18 months for heating oil, 12 months for gasoline.
Q: How many contract months will be listed for the NYMEX miNY™ futures contracts?
A: Three contract months will be listed at all times.
Q: Will crack spreads be available?
A: Crack spreads will be available overnight, but they will not be available through the CME Globex matching engine during regular daytime trading hours.
Q: Will NYMEX options be listed on CME Globex?
A: Yes, after the second phase, NYMEX will list options contracts on CME Globex.
STATUS OF NYMEX PHYSICALLY SETTLED CONTRACTS
Q: What happens to NYMEX ACCESS®?
A: NYMEX ACCESS remains operational for the time being -- the physically delivered contracts continue to trade on the NYMEX ACCESS platform after open outcry hours.
Q: What should I do if I trade NYMEX ACCESS?
A: The product slate in NYMEX contracts will be delisted from NYMEX ACCESS and listed on CME Globex in the near future. It is imperative that market participants who wish to establish their own FIX connection to CME Globex begin the process immediately to make arrangements with a CME-affiliated independent software vendor (ISV). Trading can also continue to be conducted through a company registered with the CME that has its own FIX connection.
Q: When will the physically delivered contracts be launched on CME Globex for side-by-side trading?
A: The physically delivered energy contracts that are currently traded on NYMEX ACCESS after hours will migrate to CME Globex within the next 60 to 90 days.
TRADING ON CME GLOBEX
Q: What is the error policy for electronic trades?
A: Nearly all of the rules related to trading of NYMEX products on CME Globex will be continued in NYMEX Rule Chapter 11G. In particular, NYMEX Rule 11G.00 is incorporating by reference a number of CME rules, including the CME error trade rule, which will be incorporated by reference and made applicable to the trading of NYMEX products on CME Globex. In particular, this rule makes clear that the CME error trade rule (CME Rule 588 Globex Trading Cancellations), which is administered by CME staff, will apply to trading of NYMEX products as well. This rule is similar in substance to the NYMEX error trade approach that has been in place for trading on NYMEX electronic trading systems. The CME rule lists the "no bust" ranges that apply for specific contracts, and the CME rule is being updated to add in the NYMEX contracts with no bust ranges that establish relative parity in dollar terms between the NYMEX miNY™ contracts and the regular-size financially settled NYMEX contracts that also will be listed on CME Globex.
Q: What are the anticipated sources of liquidity?
A: NYMEX has certain existing market maker programs for the NYMEX miNY™ contracts and CME will also have its own market maker program for listed NYMEX contracts. Additional liquidity is expected to be provided by NYMEX floor members who have registered for and obtained electronic tablets for entering orders to CME Globex from the NYMEX trading floor.
CONNECTIVITY TO GLOBEX
Q: Are independent software vendors (ISV) who provide the "front end" entry to CME Globex web based?
A: Yes and No. You can write directly into them, or you can access them over the web.
Q: Where can I find a list of approved ISVs?
A: The CME website has a list of approved ISVs: www.cme.com/isv
Q: Will I be able to "see" the new contracts on my ISV prior to June 11?
A: Yes. CME has activated the NYMEX energy contracts on CME Globex in order for traders to set up their specific trading screens prior to the launch. Trading will not commence, however, until June 11 at 6 PM, New York time.
Q: What does my FCM need to do in order for me to begin trading?
A: You must ask your FCM to activate the NYMEX contracts in your chosen ISV risk system.
Q: Will CME charge additional fees?
A: No.
TRADE PROCESSING AND CLEARING MATTERS
Q: Once a trade is submitted through the electronic venue, can a trader allocate his trades?
A: Yes, through e-Clerk. eClerks, authorized by the executing brokers, have the capability to reallocate electronic trades appearing in the trade management system (TMS) throughout the business day. The eClerk and broker registration forms can be accessed from the NYMEX website at: http://www.nymex.com/reallocation_eletrade.aspx
Q: Who will clear the NYMEX contracts listed on CME Globex?
A: NYMEX.
Q: If a trader is long NG and short HH, what are his margin requirements?
A: There will be netting of margin requirements on a 1-to-1 basis for the regular-sized financial and physical contracts.
Q: Will NYMEX ClearPort® still exist?
A: Yes, NYMEX ClearPort Clearing will exist for the clearing of off-exchange brokered deals and NYMEX ClearPort Trading will remain on line.
Q: Will NYMEX have a mechanism for converting positions in the physically delivered regular size futures for NYMEX miNY™ contracts?
A: The Exchange will continue to allow for exchange of futures for miNY (EFM) transactions and is renumbering former Rule 6.21E as Rule 11G.22. The only significant change is in the elimination of the prior restrictions on eligible transaction prices.
Q: Are the financially settled contracts fungible with the physical contracts?
A: No, however, the Exchange is adding a new rule (11G.23) to allow for the exchange of regular size physically-settled and regular size penultimate delivery cash-settled futures contracts in the same underlying commodity, also known as exchange of futures for bigs or EFB, which in substance parallels the provisions of the EFM rule noted above.
Q: Can positions in the NYMEX miNY™ and regular-size financially settled NYMEX futures contracts be offset?
A: New NYMEX Rule 9.10A allows for the offset and liquidation through the Exchange's clearing system of positions in these two types of contracts. The provisions of this rule are similar to a CME rule that has been in place for some time.
Q: Will the exchange of futures for swaps be permitted?
A: Amendments to NYMEX Rule 6.21A clarify that the EFS procedure will be available for the regular size financially settled NYMEX contracts listed on CME Globex, but not for the NYMEX miNY™ contracts.
Q: Are the new financially settled contracts going to have the same margins as the physically delivered contracts?
A: Yes.
Q: How will average prices be calculated?
A: The average price system that is offered by the CME is made available through its clearing system and thus will not be applicable to NYMEX products listed on CME Globex, which will be cleared instead by NYMEX. Nonetheless, a rule is being added to Chapter 11G that parallels an existing rule for floor trading of NYMEX products and that confirms that futures commission merchants will be able to use their own proprietary average price systems subject to the conditions set forth in that rule.
Q: Will the price fluctuation limits be different for the full-sized electronically traded contracts?
A: There will not be separate price fluctuation limits established for any of the financially settled NYMEX products included in the initial product slate being listed on CME Globex. A new rule in Chapter 11G, however, clarifies that a market halt in a physically settled futures contract also will trigger a market halt in the corresponding financially settled contract listed on CME Globex.
Q: Will pre-execution discussions be permitted?
A: A new rule in Chapter 11G adopts the same approach and time frame also applicable to the trading of CME products on CME Globex that allows for pre-execution discussion, but requires a period of at least five seconds to elapse from the time an order is entered for one party and the entry of the order for the second party.
Q: Do the rules on trading ahead apply to the regular-sized electronic contracts?
A: New Rules 11G.18 and 11G.26 carry over to CME Globex the provisions that have been in place for some time on NYMEX with regard to trading on the electronic systems. NYMEX is clarifying the prohibition on trading ahead to make clear that this restriction on trading in the same commodity applies to any contract based on the same underlying physical commodity regardless of the size of the futures contract or whether the contract is physically or financially settled.
Q: What is the disciplinary status of NYMEX non-members?
A: In general, a participant trading in NYMEX products on CME Globex who is not a NYMEX member or member firm will not be subject to the disciplinary jurisdiction of the Exchange with the exception of NYMEX Rule 8.99G (Summary Procedures for Denial of Access to NYMEX ClearPort® Trading or to CME Globex).
Q: Must non-members use the NYMEX arbitration procedures to resolve disputes?
A: Market participants trading NYMEX products on CME Globex who are not NYMEX members or member firms may, but will not be required, to use the NYMEX arbitration procedures to resolve disputes relating to such transactions.