Nymex falls back on internet service

The predominantly open-outcry exchange has had to fall back on its electronic Access service, which usually handles about 2% of volumes from out-of-hour trades, as traders were unable to gain access to the main exchange building in New York or its back-up capability at 22 Cortland Street.

The internet version of Access is relatively untested technology, with Nymex clearing members only recently starting to integrate the service into their company firewalls. As a result, Nymex is conducting a one-hour beta test of the system this morning, with plans to open a two-hour trading session later this afternoon, should the test prove successful. The exchange had tried to conduct a similar exercise yesterday, but had difficulty co-ordinating its efforts, said an official at one Nymex clearing member firm. He also questioned whether Nymex was prudent in its timing to test new technology.

But a resumption of trading is important for price discovery purposes on contracts that have been left open since the beginning of this week. Both energy and metal trades from the abbreviated open-outcry Tuesday session and Access trading on Monday have been marked to the settlement prices from Monday’s close. Since there are no settlement prices for the Tuesday and Wednesday sessions, these trades will be marked 'as of' for the exchange’s next trading session.

Nymex is hopeful that October gold and silver option contracts due to expire today will be settled during its planned electronic trading session this afternoon. If there is no electronic trading session today, then Nymex’s settlement committee will determine appropriate cash market indicators to be used as the basis for settlement, said the exchange’s executive committee.

Nymex’s One North End Avenue building is said to be fully intact, with all systems operational, but the area is still designated off-limits by emergence services and it is unclear when this situation will change, a Nymex spokesperson told RiskNews.

The exchange turned down an offer from the New York Board of Trade to use its back-up open-outcry floor space in Long Island.

• Tweet  
• Facebook  
• LinkedIn  
• Save this article
• Send to  
• Print this page  

• Topics
• Exchanges
• New York Mercantile Exchange (Nymex)
• Exchanges