Nymex to launch OTC trading platform

The New York Mercantile Exchange (Nymex) said it plans to introduce a trading platform designed for over-the-counter energy market participants in January, with beta tests beginning next week.

Contracts to be made available through the system will include those designed by the exchange to replicate the most commonly traded OTC products, including electricity, oil and natural gas contracts. Trading will be available on the system from 7pm Sunday EST and 3:15pm on Monday through Thursday until 2:30pm the following day, reflecting the trading hours for the exchange's traditional futures and options markets, Nymex said.

"By offering the industry a platform that brings the neutrality, integrity, and expertise of the New York Mercantile Exchange to the OTC trading arena, alongside our existing OTC clearing and confirmation services, further expands the ability of OTC market participants to operate with the protection of the exchange," said Nymex president Bo Collins. He added that this would create a "one-stop shop" for energy trading and risk management services.

Nymex also said it had formed a strategic linkage with Connecticut-based TradeCapture that will enable market participants to trade and clear exchange contracts through TradeCapture’s OTC trading platform.

Nymex is currently suing IntercontinentalExchange (Ice), the Atlanta-based OTC online commodities trading platform, for alleged copyright infringement. Nymex alleges that Ice has been using its copyrighted settlement prices of natural gas futures and light sweet crude oil futures contracts to clear and settle derivatives trades on the Ice platform. Nymex has asked for an injunction to stop Ice using the settlement prices, and is seeking damages.

Ice has remained quiet about Nymex's lawsuit, but is expected to vigorously contest its claims.