CME Group, the world's leading and most diverse derivatives marketplace, today announced it reached an open interest record for its power contracts. At the close of trading Friday, open interest in CME Group power contracts reached 1,001,362,363 Megawatt hours (MWh), breaking the billion MWh threshold for the first time ever. CME Group power contracts are listed with, and subject to, the rules of the New York Mercantile Exchange (NYMEX).
"We're very pleased to see such strong interest in our power contracts," said Bryan Durkin, chief operating officer and managing director, Products and Services at CME Group. "As the power industry continues to evolve and seeks new types of hedging products that match the unique needs of the electricity markets, we have worked with producers, marketers and other market participants to launch innovative new contracts that have offered our clients a new way to manage risk. The growth of these new products has helped drive open interest across our entire energy complex to record levels."
Among the products contributing to this milestone are swaptions, which are strips of options contracts extending over several months, and calendar spread options. CME Group also recently announced the launch of capacity swap futures, which are unique contracts that allow market participants to hedge for the maximum amount of power that could be used at any point of time, rather than for the consumption that is used over a period of time. These contracts are particularly useful to the power markets for hedging risk. Swaptions, calendar spread options and capacity swap futures are listed with, and subject to, the rules of the NYMEX.
Open interest in futures and options is the amount of positions open in existing contracts. It is a reflection of the long-term hedging interest that market participants have in a contract.