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| Natural Gas Pipeline Co. of America (NGPL) Midcontinent Basis Swap Futures (Platts IFERC) |
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The Natural Gas Pipeline Co. of America (NGPL) system consists of two major trunk lines that snake through the Midwest, from the Gulf Coast and West Texas to the Chicago area with numerous pricing points in between.
The volatility of natural gas prices has given rise to a basis market that is quoted as a differential to the price of the New York Mercantile Exchange, Inc., Henry Hub natural gas futures contract, which has evolved into the benchmark for forward natural gas markets industry-wide because of its liquidity and transparency.
To help market participants offset their price risk in this major market center, the Exchange provides an NGPL Mid-continent index natural gas basis swap futures contract. The final settlement is calculated as Platts Inside FERC's Gas Market Report NGPL Mid-continent zone index minus the NYMEX Division Henry Hub natural gas futures contract final settlement price for the corresponding contract month. Platts Inside FERC calculates the index price from its monthly bid week survey.
The lot size of 2,500 million Btus represents a commonly traded market unit and is one-quarter of the size of the Henry Hub futures contract, giving market participants additional flexibility in managing price risk. The contract, which must be traded as a multiple of the number of calendar days in the month, is available for trading on the NYMEX ClearPort® trading platform.
All positions will be aggregated and margined according to the value at risk as calculated by the SPAN® system. Cross margining of offsetting positions across markets can result in reduced margin obligations. |
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