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Intercontinental Exchange (ICE)

The Intercontinental Exchange (ICE) is a real innovation, in that it gives on-line access to people all over the U.S. and the world to commodities exchange markets. Before the ICE, most of this commodities exchange activity was conducted over the telephone and via fax machines. Now those involve have real-time access to both trades and prices, through the ICE. All transactions through the ICE are totally electronic. You can use a broker if you like, or get a trading platform and do it yourself. The ICE is located in Atlanta, Georgia, and is connected to individuals and companies trading in oil futures, gas futures, electric power and all sorts of commodity derivative instruments. The ICE started up in the year 2000, and has grown by leaps and bounds since. It made the Congressional spotlights, with complaints from Congressman Frank Wolf (10th CD, Virginia) that 80% of energy commodities are bought and sold on the ICE, with virtually no regulation at all. Under Commodity Futures Trading Commission (CFTC) regulations, traders on the NY Mercantile Exchange (NYME) must keep records of transactions for five years and report large trading positions. Also, on the ICE there are no limits to how much of a commodity can be traded each day. So, the success of the ICE also has some dangers, in that the globalized and unregulated markets are totally brought home.

There is a certain amount of fear and recognition that the future of the ICE is definitely connected to the constant rise in energy prices. When energy prices go down, shares of the ICE traded on the NY Stock Exchange (NYSE) tend to go down. So perversely, this is typical of a certain part of the commodity sector that is profiting on continued war and tension in the key oil and gas production regions. That’s mainly the Middle East, Iraq, Iran, and secondarily countries like Venezuela, Mexico, and Nigeria.

In any case, the website, is still quite popular, and shows that the energy futures market did not die with the collapse of Enron Corporation. ICE has expanded its hours recently, and has trading in its futures subsidiary, ICE Futures, till 23:00 U.K time, which is 6:00 EST. Contracts include ICE Brent Crude Futures and options, and ICE Gas Oil Futures and Options. It’s stock was recently added to the Russell 1000, and it has communication hubs in New York, London, Singapore, and Chicago.