CME Group, the world's largest and most diverse derivatives exchange, announced today that legacy Chicago Board of Trade (CBOT) ethanol swaps contracts will be available on CME ClearPort(R), the electronic system that extends the benefits of centralized clearing to over-the-counter (OTC) products, scheduled to begin on January 25 for trade date January 26.
The legacy CBOT calendar and basis ethanol swaps are the first of dozens of new cleared-only OTC contracts expected to be introduced on CME ClearPort this year that will benefit from the safety and security of CME Clearing.
"We are pleased to combine CME Clearing, which virtually eliminates the risk of counterparty credit defaults, with the popular ClearPort system to provide an efficient way for customers to transact bilateral trades," said Bob Ray, CME Group Managing Director International Sales and Equity and Commodity Products. "We look forward to increasing our CME ClearPort swaps offerings as we strive to provide more value-added services to our customers in the OTC, as well as in our listed, markets."
Currently there is an array of energy and other OTC products that are available on CME ClearPort. In 2008 more than 467,000 contracts were exchanged daily on average through CME ClearPort.
Ethanol calendar swaps were launched at CBOT in December 2006 and since then billions of dollars worth of ethanol swaps have been cleared. In 2008, more than 291,000 ethanol swaps were cleared through CME Clearing with a notional value of more than $16 billion.
Customers use ethanol swaps to hedge their exposure to fluctuating ethanol prices. Ethanol calendar swaps provide the ability to make a transaction at a price representing the monthly average price of ethanol futures traded at CME Group. Ethanol basis swaps enable customers to better manage the risk associated with the price differences among different markets.
For more information on ethanol swaps, please go to www.cmegroup.com/energy.
