Advanced Markets Ltd., a wholesale provider of liquidity, technology and credit solutions to brokers and banks, has launched trading in spot natural gas. The new product represents an expansion of the firm’s energy product complex, which debuted last year.
Unlike other available commodity offerings, the new contract follows cash market conventions, including overnight rolls charged or paid as in spot FX. Rolls are evenly spread over the month and overnight rather than once per month jump that is associated with CFDs.
The new natural gas spot contract, which saw its first client trade January 14th, is tied to the benchmark Henry Hub delivery point. The cash contract prices a simple weighted average of the three nearby Henry Hub futures contracts traded at the New York Mercantile Exchange (NYMEX).
The new contract is traded via Advanced Markets’ Direct Market Access (DMA) market structure, which enables end users to trade on liquidity provided by bank market makers in an un-conflicted, pure agency model. Existing Advanced Markets clients can subscribe to the new products to begin offering them for trading.
Advanced Markets offers energy products to wholesale margin clients as well as institutional clients through a fully segregated triparty custody account provided in conjunction with Deutsche Bank National Trust and Deutsche Bank Hong Kong. Initially, energy products will not be available to clients through Advanced Markets prime brokerage account.
“We are pleased to expand the energy and commodity products we offer to our broker and bank clients to natural gas,” said Anthony Brocco, Executive Chairman, Advanced Markets. “The new natural gas contract will meet the growing demand from our broker clients for a diversified range of commodity products, which are transparently priced and deeply liquid.”