The Dubai Mercantile Exchange (DME), the most liquid energy focused trading venue in the GCC, reported that G.H. Financials (GH) has joined the exchange as a clearing member. The move comes as the DME positions itself as the leading venue offering and energy futures contract traded in the Asia time zone.
The DME’s appeal to global futures providers and traders continues with the joining of G.H. Financials. The London origin broker will guarantee the financial performance of trades carried out by its customers on the DME.
Mark Ibbotson, Group CEO of G. H. Financials, commented in a company statement: “G. H. Financials is delighted to join the DME as a clearing member. G. H. Financials has a strong commitment to deliver new markets and trading environments to our clients around the world. There is growing demand from our energy focused clients for market access and clearing services for the DME Oman Crude Oil product. G. H. Financials will always look to serve our customers in the markets they want to access with market leading connectivity and clearing solutions.
GH becomes the 23rd member of the exchange, joining global banks and brokerage firms including; UBS Securities, RBS Securities, Newedge, Marex, FC Stone and Barclays Capital. The exchange has been reporting record trading activity, and in February 2014, the exchange saw average daily trade volume cross 10 million barrels, an 84% increase from figures reported a year earlier.
International energy traders are quickly diversifying their portfolio to include the DME’s benchmark Oman Crude contract. The contract, that is solely traded on the DME, gives traders an opportunity to transact on a liquid contract in the Asia time zone.
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Christopher Fix, Chief Executive Officer of the DME spoke about the firm’s strategy during an interview in London with Forex Magnates: “The DME is positioning itself as the main energy contract for Asian traders, it’s an opportunity for herders to transact in a liquid contract with global standards.”
The GCC, one of the largest products of global energy instruments such as oil and natural gas, has been slow to deploy trading venues to hedge and manage risk for consumers, refiners and distributors of oil. The DME gives domestic and international users the opportunity to trade in contracts that take delivery east of the Suez.
CFDs on energy futures have been popular among margin FX traders since the sharp rise during the 2008 global recession, crude crossed the formidable $140 a barrel mark. Brokers offer a number of CFD contracts, spreads on crude are trading at 5 pips at most brokerage firms.
Energy contracts trade in tandem to global events, particularly during times of war or the threat of war in the Middle East. With the current difficulties in Russia, crude has been trading at a three-week high, trading above $101 in New York.
Abu Dhabi-based, ADS Securities is one of the only brokerage firms that offers CFDs on the DME Oman oil contract.