Houston Mercantile Exchange LLC (HMX), the new electronic exchange for trading midstream energy, feedstocks, chemicals, plastics and metals, announced today that in connection with the new offering of cleared over-the-counter (OTC) products by the CME Group, HMX will list five new NGL products and two new plastics products for trading on the HMX OTC platform. The new contracts will be electronically submitted for clearing in real time to ClearPort®, the premier industry clearing platform.
Effective immediately, HMX will offer the following new financially cleared OTC contracts:
|
Product |
Location
Basis |
Settlement
|
|
Ethane
Swap |
Mt.
Belvieu, TX |
Oil
Price Information Service (OPIS) |
|
Normal
Butane Swap |
Mt.
Belvieu, TX |
OPIS |
|
Iso
Butane Swap |
Mt.
Belvieu, TX |
OPIS |
|
Natural
Gasoline Swap |
Mt.
Belvieu, TX |
OPIS |
|
Propane
Swap |
Conway,
KS |
OPIS |
|
High
Density Polyethylene |
Houston,
TX |
Physical |
|
Polypropylene |
Houston,
TX |
Physical |
“In adding these new cleared products, we’re expanding the slate of products offered down the energy and chemical derivative value chain,” said HMX President and CEO, Eric Paulsen. “We are providing the market with risk management tools to actively manage product margin risk, while the industry standard clearing system, CME ClearPort®, will help companies mitigate credit risk and optimize financial margin efficiency. “
“With the launch of these new contracts, CME Group believes there is an opportunity to provide additional risk management tools to the energy and plastics markets,” said Joseph Raia, managing director of energy and metals for CME Group. “The current financial crisis has highlighted the importance of counterparty risk mitigation provided by the CME clearing model. Customers not only trade the products needed to manage their risk but they can rely on CME Clearing to back each transaction through its time-tested, $7 billion financial safeguard system.”
“These new cleared instruments provide the industry with unique transactional opportunities,” said Diane Miller, OPIS General Manager. “The NGL industry will certainly benefit from this capability to better manage risk using the industry standard benchmarks published by OPIS, the transparent and independent HMX trading platform, and the respected CME ClearPort® clearing system.”
