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Nasdaq Gearing Up for the Launch of Energy Futures Market

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Published on : Mar 12, 2015

Nasdaq OMX Group Inc. is gearing up to launch a new energy-futures market. Leading banks, market makers, and clearing firms have extended their support to Nasdaq in its latest drive. 

The market will be called Nasdaq Futures and will be pitted against the leading energy exchange operators internationally, such as, CME Group Inc. and Intercontinental Exchange Inc.

The chief executive officer for Nasdaq, Robert Greifelf, mentioned in one of his recent interviews that the new market will focus to emasculate competitors by offering prices which as 50% lowers than the prevalent rates in the market. 
He further said that with the launch of Nasdaq Futures the agency is venturing to eradicate monopolistic trends that overpowered the energy trading market until now. He added that firms willing to trade on Nasdaq Futures will have to pass through the permits of Options Clearing Corp. unlike CME and ICE which require firms to clear through their own organization, thereby increasing the rate of profit earned with every registered trade. 

At present, Nasdaq is keen on acquiring 10% of the overall market share of energy futures and that too within a span of two years, which is expected to add approximately US$50 million a year to the bottom line of the company, as informed by a source from the company. However, when the company spokesperson was contacted for his view on the same, he denied making any comments. 

Advantage Futures LLC, Morgan Chase & Co., Goldman Sachs Group Inc., J.P. Morgan Stanley, ABN Amro Group, and Virtu Financial LLC are the founding participants of the Nasdaq Futures. The new market will encompass option contracts and futures across Brent crude oil, U.S. power, U.S. natural gas, and other products. The market is expected to be begin trading by the end of summer.