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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: KFE who wrote (15310)	2/20/2002 7:40:18 PM
From: Raymond Duray	Read Replies (1) \| Respond to of 18137

KFE, Always happy to hear from a level headed fellow like you. Thanks. What do make of this development? I think the mania of markets may be mellowing? Et tu? riskcenter.com February 20: NYMEX Abandons Electricity Futures Contracts Due To Lack Of Liquidity Location: New York Author: RiskCenter Staff Date: Wednesday, February 20, 2002 The New York Mercantile Exchange has abandoned the electricity futures business, at least for the time being, when it delisted all contracts last Friday. Exchange President Robert Collins said NYMEX decided to delist futures contracts at the California-Oregon Border, Palo Verde, Cinergy, Entergy, PJM and Mid-Columbia trading hubs. An exchange spokeswoman blamed a lack of liquidity for last week's decision. NYMEX started electricity futures contracts in the spring of 1996 in Western markets. NYMEX, however, wants to reintroduce revamped electricity futures contracts and also embark on over-the-counter markets for power, gas, oil and other commodities within a few months, she said. The reintroduced electricity futures won't have all the same trading points as the original contracts, and the delivery locations yet to be determined. The spokeswoman declined to confirm reports that NYMEX is in talks with the Intercontinental Exchange concerning over-the-counter markets. NYMEX plans to offer both the new futures contracts and over-the-counter clearinghouse services because a lot of transactions are made between the two markets, she said. "You might not see the same type of traditional futures contracts, but more creativity and flexibility in the trading instruments," the spokeswoman said. "The new contracts will be a quite different from than these. Certainly, we plan to continue to have a strong presence in this market." She attributed the lack of trading in electricity futures to the limits in the nation's transmission system and variations in state regulations and uneven progress in introducing retail competition. Hedging across disparate interconnections is difficult to impossible, she said. Futures were sold for future delivery by month. On the opening day of the NYMEX futures market, traders and brokers bought 978 contracts for June delivery at COB. But while initial trading volumes increased, the activity dropped off. Price increases in California, New York and other regions led to political, regulatory and consumer criticisms of power markets and uncertainty about taking positions in the futures market. Deregulation, price controls, and federal and state investigations of power markets have further muddied the financial waters.