The New York Mercantile Exchange or NYMEX often referred as “The Merc” is considered as the world’s largest physical commodity futures exchange. It is a subsidiary of the CME Group located in Chicago.
There are two divisions available for trading, the NYMEX division which houses the energy, palladium, and platinum markets and the second division being COMEX (Commodity Exchange Inc.) which houses and trades metals such as copper, gold, and silver. The FTSE 100 index can also be found under the latter division.
The NYMEX is responsible for handling energy carriers, metals, and various commodities that are worth billions of dollars. These are bought and sold on both the trading floor and overnight electronic trading computer system for future deliveries. Prices that are quoted for transactions on the exchange serve as the basis for prices people pay for different commodities across the world.
The NYMEX’s floor is governed and regulated by the Commodity Futures Trading Commission, one of the United States government’s independent agencies. Individual companies that perform trades on the exchange are required to send their own independent brokers, meaning that a number of employees present on the floor are representatives of various big corporations. In addition, transactions are recorded by the exchange employees who have nothing to do with the actual trade.
Despite being mostly electronic since 2006, the NYMEX has a small venue that still maintains and utilizes the open outcry trading system. The system has traders employ the use of shouting and complex hand gestures while on the physical trading floor. An interesting thing to point out is that there has been a published copy of the various hand signals used at NYMEX.