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Industry Spotlight > Clearing and Custodial Firms

Platforms, Margins Changing for Energy Derivatives

By Staff Writer

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BRIARCLIFF MANOR, N.Y. (HedgeWorld.com)–Optionable Inc., a provider of energy derivatives brokerage services, announced that its OPEX trading platform has been certified to connect with the New York Mercantile Exchange’s electronic trading and clearing platform, ClearPort.

Optionable said that OPEX is in the final stages of development and testing. It has been designed by options traders to facilitate strategies that are currently executed on the over-the-counter and commodity exchanges.

James Newsome, president of NYMEX, said in a statement, “We are pleased to work with Optionable to provide natural gas and oil traders with the ability to electronically clear trades on this exciting platform through NYMEX ClearPort.” Mr. Newsome added that since the debut of ClearPort, in 2002, “the introduction of cleared OTC contracts, as regulated futures contracts, has reduced bilateral credit risk and the amount of capital market participants are required to post on each trade.”

In addition to its development of OPEX, Optionable has a traditional voice brokerage business.

The anticipated arrival of OPEX isn’t the only energy-derivatives change in the air at NYMEX. On Thursday [Feb. 23] the exchange announced margin increases for NYMEX ClearPoint petroleum products and spread futures contracts:

Margins for the east-west fuel oil spread swap futures contract increase to $5,000 from $1,700 for clearing members, to US$5,500 from US$1,870 for members, and to $6,750 from $2,295 for customers. Intra-commodity spread margins to increase to $1,000 from $340 for clearing members, to $1,100 from $374 for members, and to $1,350 from $459 for customers.

Margins for the high-low sulfur fuel oil spread swap futures contract increase to $10,000 from US$1,700 for clearing members, to $11,000 from $1,870 for members, and to $13,500 from $2,295 for customers. Intra-commodity spread margins will increase to $1,000 from $340 for clearing members, to $1,100 from $374 for members, and to $1,350 from $459 for customers.

Margins for the WTI-Brent crude oil spread calendar swap futures contract increase to $500 from $250 for clearing members, to $550 from $275 for members, and to $675 from $338 for customers. Intra-commodity spread margins will be $50 for clearing members, to $55 for members, and to $68 for customers.

Margins for the Singapore gas/oil calendar swap futures contract increase to $3,500 from $2,500 for clearing members, to $3,850 from US$2,750 for members, and to $4,725 from $3,375 for customers. Intra-commodity spread margins to increase to $400 from $250 for clearing members, to $440 from $275 for members, and to $540 from $338 for customers.

On Friday [Feb. 24], NYMEX announced margin decreases for its natural gas and related futures (which don’t trade on ClearPort):

Margins for the first month decrease to $7,500 from $9000 for clearing members, to $8,250 from $9,900 for members, and to $10,125 from $12,150 for customers. For the second month, the decrease will be to $6,500 from $8,000 for clearing members, to $7,150 from $8,800 for members, and to $8,775 from $10,800 for customers. For the third to seventh months, to $6,500 from $7,000 for clearing members, to $7,150 from $7,700 for members, and to US$8,775 from US$9,450 for customers. For the eighth to 12th months, to $7,500 from $ 8,500 for clearing members, to $8, 250 from US$9,350 for members, and to $10,125 from $11,475 for customers.

The margins for the first month of the Henry Hub swap futures and Henry Hub penultimate swap contract decrease to $1,875 from $2,250 for clearing members, to $2,063 from US$2,475 for members, and to $2,531 from $3,038 for customers. Margins on the second month to decrease to $1,625 from $2,000 for clearing members, to $1,788 from $2,200 for members, and to $2,194 from $2,700 for customers. For the third to seventh months, to $1,625 from $1,750 for clearing members, to $1,788 from $1,925 for members, and to $2,194 from $2,363 for customers. For the eighth to 12th months, to $1,875 from $2,125 for clearing members, to $2,063 from $2,338 for members, and to $2,531 from US$2,869 for customers.

Margins for the first month of the NYMEX miNY natural gas futures contract decrease to $1,875 from $2,250 for clearing members, to $2,063 from $2,475 for members, and to $2,531 from $3,038 for customers. Margins on the second month to decrease to $1,625 from $2,000 for clearing members, to $1,788 from $2,200 for members, and to $2,194 from $2,700 for customers.

The margins for the first month of the Henry Hub swing swap futures contract decrease to $1,875 from $2,250 for clearing members, to $2,063 from $2,475 for members, and to $2,531 from $3,038 for customers.

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Contact Bob Keane with questions or comments at [email protected].

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