The New York Mercantile Exchange

When examining commodity and futures exchanges within the United States, the New York Mercantile Exchange, or NYMEX for short, is one of the most well-known and influential trading platforms in the world. Founded 130 years ago in 1882 and located in the World Financial Center of New York City, the NYMEX handles billions of dollars worth of various commodities. These are either bought and sold on the trading floor itself or more commonly through electronic transactions. Although most orders are now carried out in this fashion, a small percentage still employ the “open outcry” system of physical presence on the trading floor accompanied by the shouts and hand gestures often seen traditionally depicted.

The NYMEX deals heavily in energy products such as crude oil, gasoline, and electricity as well as being integrated in the trading of certain precious metals including platinum and palladium. As these are listed in dollars, their values can also be used as a broader indicator of both domestic and foreign economic trends, especially when concerning the pricing of energy products such as the consumption of crude oil. The two fundamental reasons why this system is mainly comprised of electronic contracts and trades are liquidity and open market competitiveness.

The NYMEX is of noteworthy importance to commodity traders due fundamentally to the fact that many prices around the globe are often determined directly from this market. In times when a growing number of individuals are becoming involved in commodity trading, it is important to carefully monitor this benchmark exchange.

>> Read more about the other Commodity Trading Exchanges