“This open interest record is phenomenal for MGEX,” said MGEX Board Member and floor trader Cliff Larson III of The Cliff Larson Company. “The industry as a whole is experiencing record trading volume and open interest.” Larson says several factors have likely contributed to the rise in open interest. “The opening of new contract months that allow us to trade 24 months out was very beneficial to the exchange and has been a factor in the record open interest. It’s a very exciting time with lots of opportunities for traders.”
According to MGEX Board Member Scott O’Donnell of Frontier Futures, Inc., the record open interest is likely to attract attention from the large commodity funds. “The industry tells us that 50,000 contracts of open interest is the trigger point. An active market tends to increase liquidity and attract new participants, so this growth is good for everybody,” he said. “Our firm is a clearing member of the exchange. I’m also proud of how well the MGEX has handled this increase in volume. Even with setting new records almost daily, the operations have run smoothly.”
Spring wheat futures daily open interest closed at 44,195 contracts at the end of 2005. The new record reflects a nearly 30 percent increase in open interest since that time.
MGEX also announced that on May 18 three memberships sold at an all time high of $41,000 each. MGEX membership grants the owner trading privileges, voting rights and reduced trading fees. Membership seats are also seen as an investment opportunity. Membership values tend to fluctuate, often reflecting opportunities at the exchange and within the industry. Memberships were selling at just $20,000 one year ago.
Detailed open interest and volume records as well as membership bids and offers are available on the MGEX website, www.mgex.com.
