New York Mercantile Exchange
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| Type | Component of CME Group |
|---|---|
| Founded | 1882 |
| Headquarters | New York, US |
| Website | www.nymex.com |
The New York Mercantile Exchange (NYMEX) is the world's largest physical commodity futures exchange, located in New York City. Its two principal divisions are the New York Mercantile Exchange and Commodity Exchange, Inc (COMEX) which were once separate but are now merged. The parent company of the New York Mercantile Exchange, Inc., NYMEX Holdings, Inc. became listed on the New York Stock Exchange on November 17, 2006, under the ticker symbol NMX. Less than two years later, on August 22, 2008, NYMEX Holdings was formally acquired by CME Group (symbol: CME) and the NMX symbol was de-listed.
The New York Mercantile Exchange handles billions of dollars worth of energy products, metals, and other commodities being bought and sold on the trading floor and the overnight electronic trading computer systems. The prices quoted for transactions on the exchange are the basis for prices that people pay for various commodities throughout the world.
The floor of the NYMEX is regulated by the Commodity Futures Trading Commission, an independent agency of the United States government. Each individual company that trades on the exchange must send its own independent brokers. Therefore, a few employees on the floor of the exchange represent a big corporation and the exchange employees only record the transactions and have nothing to do with the actual trade. The NYMEX is one of the few exchanges in the world to maintain the open outcry system, where traders employ shouting and complex hand gestures on the physical trading floor.
On February 26, 2003, the New York Board of Trade (NYBOT) signed a lease agreement with the NYMEX to move into its World Financial Center headquarters and trading facility after the NYBOT's original headquarters and trading floor was destroyed in the September 11, 2001 terrorist attacks on the World Trade Center.[1]
After the September 11 attacks, the NYMEX built a $12 million trading floor backup facility outside of New York City with 700 traders' booths, 2,000 telephones, and a backup computer system. This backup is in case of another terrorist attack on Lower Manhattan or a natural disaster.[2]
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[edit] History of the exchange
Commodity exchanges began in the middle of the 19th century, when businessmen began organizing market forums to make buying and selling of commodities easier. These marketplaces provided a place for buyers and sellers to set the quality, standards, and establish rules of business. By the late 1800s about 1,600 marketplaces had sprung up at ports and railroad stations. In 1872, a group of Manhattan dairy merchants got together and created the Butter and Cheese Exchange of New York. Soon, egg trade became part of the business conducted on the exchange and the name was modified to the Butter, Cheese, and Egg Exchange. In 1882, the name finally changed to the New York Mercantile Exchange when opening trade to dried fruits, canned goods, and poultry.
As centralized warehouses were built into principal market centers such as New York and Chicago in the early 20th century, exchanges in smaller cities began to disappear giving more business to the exchanges such as the NYMEX in bigger cities. In 1933, the COMEX was established through the merger of four smaller exchanges; the National Metal Exchange, the Rubber Exchange of New York, the National Raw Silk Exchange, and the New York Hide Exchange. On August 3, 1994, the NYMEX and COMEX finally merged under the NYMEX name. Now, the NYMEX operates in a trading facility and office building with two trading floors in the World Financial Center in downtown Manhattan. On March 17, 2008, NYMEX accepted an offer from CME Group, the parent of the Chicago Mercantile Exchange and the Chicago Board of Trade, to purchase it for $8.9 billion in cash and CME Group Stock. The proposal was approved by NYMEX shareholders and seatholders, as well as CME Group shareholders on August 18, 2008. NYMEX systems are expected to be fully integrated into CME Group by September 30, 2009.[3] [4]
[edit] Location
The official address of the NYMEX headquarters and trading facility is One North End Avenue, New York, NY 10282-1101. The company has additional offices in Houston, Washington D.C., Dubai, London, and Hong Kong.
[edit] Trading platforms
- Pit (open outcry)
- Electronic trading (Globex)
[edit] Commodities traded on the exchange
[edit] NYMEX Division[5]
[edit] COMEX Division
[edit] Holidays and Special Dates
2008 Holiday Schedule
- Tuesday, January 1
(Electronic trading and NYMEX ClearPort are closed for the holiday; these venues will reopen at 6:00 PM for the next day's trade date) New Year's Holiday
- Monday, January 21
(Electronic trading and NYMEX ClearPort are unaffected and will run on a normal schedule) Martin Luther King Day
- Monday, February 18
(Electronic trading and NYMEX ClearPort are unaffected and will run on a normal schedule) President's Day
- Friday, March 21
(Electronic trading and NYMEX ClearPort are closed for the holiday; these venues will reopen at 6:00 PM Sunday for the next day’s trade date) Good Friday
- Monday, May 26
(Electronic trading and NYMEX ClearPort are unaffected and will run on a normal schedule) Memorial Day
- Friday, July 4
(Electronic trading and NYMEX ClearPort are unaffected and will run on a normal schedule) Independence Day
- Monday, September, 1
(Electronic trading and NYMEX ClearPort are unaffected and will run on a normal schedule) Labor Day
- Thursday, November 27
(Electronic trading and NYMEX ClearPort are unaffected and will run on a normal schedule) Thanksgiving
- Thursday, December 25
(Electronic trading and NYMEX ClearPort are closed for the holiday; these venues will reopen at 6:00 PM for the next day's trade date) Christmas Day
[edit] Recent developments
In August 2008, it was revealed that oil speculators had supposedly increased the volatility of the price of oil; Congressman John Dingell criticized the Commodity Futures Trading Commission for failing to scrutinize oil futures traders, in particular Swiss company Vitol.[6] An investigation showed:
Even more surprising to the commodities markets was the massive size of Vitol's portfolio - at one point in June [2008], the firm held 11 percent of all the oil contracts on the regulated New York Mercantile Exchange.
[edit] NYMEX in Popular Culture
In the movie "What Happens in Vegas", Cameron Diaz's character is a trader at the New York Mercantile Exchange. She is shown multiple times, as a trader on the floor, buying commodities.
In the fiction book "Rigged" by Ben Mezrich the NYMEX is the backdrop for the story of a young Harvard graduate who co-founds the Dubai Mercantile Exchange.
[edit] See also
- List of futures exchanges
- List of traded commodities
- Commodity Exchange Act
- Chicago Board of Trade
- Energy law
- New York Cotton Exchange
[edit] References
- ^ NYBOT press release
- ^ NYCP website
- ^ CME website
- ^ CME website press release
- ^ List of Commodity Delivery Dates on Wikinvest
- ^ a b David Cho, "Sway of oil speculators revealed", Washington Post, August 21, 2008, synidated at the Albany Times Union, found at Albany Times Union website. Accessed August 27, 2008.
[edit] External links
Coordinates: 40°42′52″N 74°1′1″W / 40.71444°N 74.01694°W
