DME, a leading international energy futures and commodities exchange, launched a new trading mechanism today, Trade at Marker (TAM), for customers of the DME Oman crude oil futures contract.
TAM will allow DME customers to buy and sell oil at a price directly linked to DME’s 12:30pm Marker Price. The average of the month’s Marker Prices on DME is the basis of the crude oil export price of the Sultanate of Oman and the Emirate of Dubai, making the DME Marker Price one of the world’s key energy benchmarks.
The ability to trade the Marker Price directly will be very useful to investors who want exposure to Oman and Dubai’s crude oil export price but who may not necessarily want to trade during DME’s settlement window. The TAM trading mechanism can be traded on a daily basis for the front three months of the DME Oman crude oil contract. TAM will be particularly useful for asset managers that want exposure to the DME Oman without needing to participate in the price-formation process or refiners that would like to guarantee that their procurement costs are as close as possible to the Official Selling Price (OSP) of Oman crude oil.
Christopher Fix, Chief Executive Officer of DME, said: “We are always committed to provide our customers with different tools to manage their risk more easily. At a time when price volatility has returned to the market, a trading mechanism like Trade at Marker that provides greater certainty in execution will be very attractive to some traders. I am confident that this launch will add to DME’s growing reputation for innovation.”
The company has seen its trading volumes surge in recent months. Volumes between January and May 2014 were 57% higher than in the same period of the previous year.
DME is a joint venture between Dubai Holding, Oman Investment Fund and CME Group. Financial institutions and energy trading firms such as: Goldman Sachs, JPMorgan, Morgan Stanley, Shell and Vitol also hold equity stakes in the company.
