While improving the practicability of Brent crude oil futures contracts, the Exchange has launched trading platforms of automatic quotation, price report and price difference between Brent crude oil and WTI crude oil, respectively clearing Brent crude oil and light low-sulfur crude oil of NYMEX, which is an important development of the market, because arbitrage transactions in two different markets can be completed through this platform, and it will gradually become a liquid market with transparent price, competitive trading and simple operation.
The exchange believes that arbitrage trading is a kind of transaction, which allows operators to make full use of margin and effectively reduce transaction costs. When long positions offset short positions, the exchange thinks that arbitrage reduces market risk, especially the arbitrage of Brent crude oil futures and WTI crude oil, because these two futures contracts have good correlation, and the exchange provides 95% margin credit for one-to-one Brent /WTI arbitrage trading. The exchange also provided a cost control scheme for Brent crude oil futures contracts, which reduced a lot of operating expenses for market participants.
Brent crude oil futures contracts are settled in cash, with market data collected by Isilor, Argus and Reuters in Dublin as the index. Brent crude oil futures trading is cleared by the special clearing institution of the exchange, which ensures the safety of funds, among which neutrality, liquidity and market transparency have become the characteristics of NYMEX.