Nasdaq Futures, Inc. (NFX)

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Nasdaq Futures, Inc. (NFX)
Nasdaq Logo.png
Founded 2015
Headquarters New York
Key People Magnus Haglind, CEO
Products Interest rate derivatives
Website nasdaqomx.com/nlx

Nasdaq Futures, Inc. (NFX), a wholly-owned subsidiary of Nasdaq, is a U.S.based exchange for energy and treasury futures products. The exchange, launched in early 2015, began listing products in July of that year.[1]

NFX is a CFTC-regulated designated contract market listing fully electronic products, with clearing services provided by OCC.[2]


History, Products and Rationale

In March 2015, Nasdaq announced its launch of a U.S. based platform for energy futures to, in the words of CEO Bob Greifeld, "bring around the demise of the monopolistic environment" in energy trading.[3]

Its core products include futures and options on crude oil, natural gas, power and other products, with identical contract specifications to those of CME Group and ICE, except they are cash-settled rather than physically delivered. Founding members including Goldman Sachs, JPMorgan Chase, ABN Amro, Advantage Futures, Morgan Stanley and Virtu Financial.[4]

At the launch date in July 2015, 16 brokers had been approved as members, with about 40 market-makers and proprietary trading firms signed up to trade on the exchange.[5] Real-time market data is provided by Bloomberg, and connectivity is provided by Trading Technologies.

Initially, the exchange is competing on price, by charging no trading fees for at least the first nine months of operations. According to Greifeld, "In this world, the revenue per contract is $1.38 to $1.42, so we can come in at half that price and be quite happy with the margin."

On January 11, 2016 NFX recorded a new daily high volume mark of 60,350 contracts in natural gas options (LNQ), a 27% market share of the total volume across all energy futures exchanges.

John Lothian News Interviews

New Energy: Nasdaq’s Greifeld Looks To Shake Up Energy Space
Nasdaq’s CEO Bob Greifeld shook things up at the FIA Boca Conference with the announcement it plans to launch a new futures exchange that will focus on energies, bringing new competition to the Intercontinental Exchange and CME Group.

Greifeld spoke with John Lothian News editor-in-chief Jim Kharouf about the new pricing and clearing model, as well as his views on regulation, technology and how Nasdaq is positioned going forward.


New Energy: Nasdaq Prepping For Launch Of Nasdaq Futures
Nasdaq Futures was announced in March with a goal of shaking up the energy futures markets. Since then, Nasdaq’s team has been busy building infrastructure and signing up new members. The question is, will they challenge the likes of CME Group’s Nymex or the Intercontinental Exchange?

Hans-Ole Jochumsen said that Nasdaq Futures, or NFX, has the model to compete with established markets. Its partnership with OCC will clear its natural gas, crude oil and power futures contracts at a mere 4 cents per side. That, coupled with the Nasdaq trading engine, GENIUM INET, that is common to many in the industry, will keep trading costs many times lower than entrenched competitors.

Key People

References

  1. Products - NASDAQ Futures. Nasdaq.
  2. Nasdaq NFX goes "viral" with clients - CEO. FOW.
  3. Nasdaq to Launch Energy Futures Market. Wall Street Journal.
  4. Nasdaq to distribute real-time NFX data via Bloomberg at launch. Fierce Finance IT.
  5. Nasdaq NFX goes "viral" with clients - CEO. FOW.