Trading Natural Gas Futures
Natural gas futures are traded on the New York Mercantile Exchange. This is the largest natural gas futures market in the world. Below are the contract specs for natural gas futures.
Trading Unit10,000 million British thermal units (mmBtu).Price QuotationU.S. dollars and cents per mmBtu.Trading Hours (All times are New York time)Open outcry trading is conducted from 10:00 AM until 2:30 PM.After hours futures trading is conducted via the CME Globex trading platform, with the following schedule:Sunday 6:00 PM until 9:50 AM the following day (Monday’s trade date)Monday Thursday 3:15 PM until 5:15 PM the same day (Current trade date)6:00 PM until 9:50 AM the following day (Next trade date)Friday 3:15 PM until 5:15 PM (Friday’s trade date)Trading Months72 consecutive months commencing with the next calendar month (for example, on January 6, 2004, trading occurs in all months from February 2004 through January 2010).Minimum Price Fluctuation$0.001 (0.1) per mmBtu ($10.00 per contract).Maximum Daily Price Fluctuation$3.00 per mmBtu ($30,000 per contract) for all months. If any contract is traded, bid, or offered at the limit for five minutes, trading is halted for five minutes. When trading resumes, the limit is expanded by $3.00 per mmBtu in either direction. If another halt were triggered, the market would continue to be expanded by $3.00 per mmBtu in either direction after each successive five-minute trading halt. There will be no maximum price fluctuation limits during any one trading session.Last Trading DayTrading terminates three business days prior to the first calendar day of the delivery month.Settlement TypePhysical.DeliveryThe Sabine Pipe Line Co. Henry Hub in Louisiana. Seller is responsible for the movement of the gas through the Hub; the buyer, from the Hub. The Hub fee will be paid by seller.Delivery PeriodDelivery shall take place no earlier than the first calendar day of the delivery month and shall be completed no later than the last calendar day of the delivery month. All deliveries shall be made at as uniform as possible an hourly and daily rate of flow over the course of the delivery month.Alternate Delivery Procedure (ADP)An alternate delivery procedure is available to buyers and sellers who have been matched by the Exchange subsequent to the termination of trading in the spot month contract. If buyer and seller agree to consummate delivery under terms different from those prescribed in the contract specifications, they may proceed on that basis after submitting a notice of their intention to the Exchange.Exchange of Futures for Physicals (EFP) or Swaps (EFS)The commercial buyer or seller may exchange a futures position for a physical position or a swaps position of equal quantity by submitting a notice to the Exchange. EFPs and EFSs may be used to either initiate or liquidate a futures position.Grade and Quality SpecificationsPipeline specifications in effect at time of delivery.Position Accountability Levels and LimitsAny one month/all months: 12,000 net futures, but not to exceed 1,000 in the last three days of trading in the spot month.Margin RequirementsMargins are required for open futures positions.
Source: New York Mercantile Exchange, Inc