The Dubai Mercantile Exchange (DME) Limited’s CEO Gary King has unveiled plans to introduce a new trading hub concept on an electronic trading floor.
The DME intends to implement electronic trading in 2006 and aims to initially develop and trade a Middle East sour crude oil futures contract in the heart of the world’s largest oil-producing region, the Middle East.
In an effort to capitalize on local liquidity, draw regional market participants and attract financial institutions from the Middle East and internationally, the DME unveiled its plans to introduce hubs in its trading facility.
The hubs will consist of four to six-seat clusters that will be made available to regional and international financial institutions as well as trading companies. Each hub will contain all the necessary hardware for traders to execute their trades electronically and manage their risk from the Exchange floor. The DME claims that it will be the first exchange to introduce this unique hub format.
The company says that this will effectively create an energy trading community on the floor of the Exchange, which will not only help to generate liquidity but will further provide the opportunity for international firms to relocate to the floor of the DME, bringing together experienced traders, global banks, local institutions and individuals from around the world.