Difference between NYMEX WTI and ICE WTI contracts
- Thread starter nemesis45
- Start date
Usually has to do with the position limits and margin required by each respective exchange and the related clearing preference for OTC option market makers when entering/exiting deltas.
Its not arbable.
offer 100.01
Bid 100.00
offer 100.00
Bid 99.99
Buy 100.00 second, can only sell at 100.00 first,
Sell 100.00 first, can only buy at 100.00 second
The issues are margin, trading hours, market data fees, automated trading and options.
Some traders are already on ICE (e.g., Natural Gas and Power traders) and it's more convenient to go ahead and trade Crude there.
Also, and this is big, if you have spreads or cracks on. then you should stay on one or the other exchange so the span gives you margin credit for this. An example is the spread between WTI and Brent. Held either on CME (as WTI - "BZ") or on ICE, as "ICE WTI" - Brent (proper), your margin is roughly two-thirds that for each contract. Held as CME WTI - ICE (IPE) Brent, it's twice that for a single. For the same margin, you can put on three times as much if your spread is between contracts on the same exchange.
CME has a very liquid Globex window available for off-hours. ICE will be much less liquid.
If you stay with one or the other, you don't pay for Market Data on both.
With CME, you can easily robotically trade. With ICE, you must use one of their preferred (and costly) vendors.
CME has a very liquid complete chain of options for each contract.
For 99% of US-based discretionary traders, CME is the best choice.
Some traders are already on ICE (e.g., Natural Gas and Power traders) and it's more convenient to go ahead and trade Crude there.
Also, and this is big, if you have spreads or cracks on. then you should stay on one or the other exchange so the span gives you margin credit for this. An example is the spread between WTI and Brent. Held either on CME (as WTI - "BZ") or on ICE, as "ICE WTI" - Brent (proper), your margin is roughly two-thirds that for each contract. Held as CME WTI - ICE (IPE) Brent, it's twice that for a single. For the same margin, you can put on three times as much if your spread is between contracts on the same exchange.
CME has a very liquid Globex window available for off-hours. ICE will be much less liquid.
If you stay with one or the other, you don't pay for Market Data on both.
With CME, you can easily robotically trade. With ICE, you must use one of their preferred (and costly) vendors.
CME has a very liquid complete chain of options for each contract.
For 99% of US-based discretionary traders, CME is the best choice.
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There's no way to arb this and even if there were the powers that be would have it locked down.
This is a popular contract when used with the WTI/Brent spread (symbol COIL.WTI on IB). There's nothing wrong with trading Brent on ICE EU/IPE, just be aware of when the most liquid times are (London open).
This is a popular contract when used with the WTI/Brent spread (symbol COIL.WTI on IB). There's nothing wrong with trading Brent on ICE EU/IPE, just be aware of when the most liquid times are (London open).