Nymex Introduces Inter-Exchange Arbitrage Transaction For Its Crude Oil Futures Contract

The New York Mercantile Exchange, Inc., today introduced Inter-Exchange Arbitrage (IXA), a method for processing trades of its light, sweet crude oil futures contract against Brent crude oil futures contracts held on other exchanges.

Specifically, the rule addresses an arbitrage transaction between NYMEX Division light, sweet crude oil and Brent crude oil that is privately negotiated on the basis of a stated price differential, and for which the NYMEX crude oil leg is 50 contracts or more. The process is similar in nature to the existing procedures for exchange of futures for physicals (EFP) and exchange of futures for swap (EFS) postings on the trading floor already in place.