1 The New York Mercantile Exchange

The New York Mercantile Exchange

Overview

The New York Mercantile Stock Exchange, NYMEX, or more commonly referred to as “The Merc.” It is owned and operated by Chicago’s CME Group. Apart from its office in Manhattan, New York, there are also additional offices located in Atlanta, Boston, Dubai, London, San Francisco, Tokyo, and Washington.

The NYMEX has is one of the two divisions for trading, with the other being the Commodity Exchange (COMEX). The former of the two is home to various energy sources and metals such as palladium and platinum. The various prices that are quoted become the very basis for the prices people around the world pay to acquire the various commodities offered.

The Exchange’s floor is regulated by the Commodity Futures Trading Commission, which are one the United States Government’s independent agencies. Companies that perform trades within the exchange are required to deploy their own individual brokers. This means that the exchange only has a few employees present on their floor and they need only record the transactions. They do not participate in the actual trade.

Traded Commodities

As mentioned earlier, the NYMEX is home to various energy sources and metals. Below are some of the commodities available under the NYMEX.
• Coal
• Crude Oil
• Electricity
• Gasoline
• Heating Oil
• Natural Gas
• Palladium
• Platinum
• Propane
• Uranium

Both the futures and options of energy and precious metals have become ideal tools for companies that try to mitigate risk. This is done in the form of hedging their options. The simplicity provided by these tools has become an important component in hedging activities and the prediction of future prices, thus making the NYMEX a key player in both the trading and hedging worlds.