A battle between two energy exchanges
OPEN-OUTCRY trading is supposed to be a quaint, outdated practice, rapidly being replaced by sleeker, cheaper electronic systems. Try telling that to the New York Mercantile Exchange (NYMEX), the world's largest commodities exchange. On November 1st the NYMEX opened an open-outcry pit in Dublin to handle Brent crude futures, the benchmark contract for pricing two-thirds of the world's oil.
The NYMEX is trying to snatch liquidity from London's International Petroleum Exchange (IPE), which trades the most Brent contracts; the New York exchange has hitherto concentrated on West Texas Intermediate, an American benchmark grade. The new pit is a response to the IPE's efforts to modernise. On the same day as NYMEX traders started shouting Brent prices in Dublin, the IPE did away with its morning open-outcry session: now such trades must be electronic, or done in the pit after lunch.
The New York exchange claims that customers, such as hedge funds or energy companies, prefer open-outcry because it allows for more liquidity. Although most other exchanges are heading in the opposite direction, in commodity markets such as the NYMEX, pressure from "locals"--self-employed traders--is helping to prop up open-outcry, although some reckon that customers pay up to five times as much as with electronic systems. Even the IPE has no plans to abolish its floor. Only last month it signed a lease, lasting until 2011, for its trading floor in London.
Dublin's new pit is "showing promise", says Rob Laughlin, a trader with Man Financial, despite a few technical glitches. On its first day it handled 5,726 lots of Brent (each lot, or contract, is 1,000 barrels), over a third of the volume in the IPE's new morning electronic session. By the year's end, predicts Mr Laughlin, it should be clear whether the venture will be viable. It would stand a better chance if it moved to
London. It may yet: it started in Ireland because regulatory approval could be obtained faster there than in Britain.
Ultimately, having both exchanges offering similar contracts will be unsustainable. Stealing liquidity from an established market leader, as the NYMEX is trying to do, is a hard task. Eurex, Europe's largest futures exchange, set up shop in Chicago this year, intending to grab American Treasury-bond contracts from the Chicago Board of Trade. It has made little headway. And the NYMEX has dabbled in Brent contracts before, without success.
Given the importance of liquidity in exchanges, why do the IPE and the NYMEX not band together? There have been merger talks before, and something might yet happen. Some say that the freewheeling NYMEX and the more staid IPE could never mix. For now, in any case, the two exchanges will slug it out--across the Irish Sea as well as across the Atlantic.
Economist; 11/6/2004, Vol. 373 Issue 8400, p78-78, 1/2p, 1c
注(1)：本文選自Economist；11/6/2004, p78-78, 1/2p, 1c；
注(2)：本文習題命題模仿2001年真題text 2第1題(1)，text 4第2題(2)，text 1第2題(4)，2002年真題text 2第2題(3)，text 3第4題(5)；
1.The NYMEX and IPE are___________.
[A] both using open outcry trading as a major trading form
[B] partners that are reciprocal in their business activities
[C] rivals that are competing in the oil trading market
[D] both taking efforts to modernize their trading practice
2.According to the author, one of the reasons that the NYMEX takes open-outcry trading is__________.
[A] the preference of its customers
[B] the standard practice of energy exchange
[C] the long tradition of this trading practice
[D] the nostalgic feeling it arouses
3.The word “glitches” (Line 2, Paragraph 4) most probably means_________.
4.From Paragraph 4 we can infer that_________.
[A] trading volume in the IPE's new morning electronic session is falling
[B] London is a better business location for energy exchanges than Dublin
[C] Britain’s regulators are less efficient than those of Ireland
[D] the Dublin pit of the NYMEX will be more prosperous next year
5.We can draw a conclusion from the text that___________.
[A] it’s very unlikely that the NYMEX and the IPE could combine their businesses
[B] the NYMEX will fail in Ireland as many precedents have shown
[C] the two energy exchanges will figure out a way to cooperate with each other
[D] the market environment for both energy exchanges is getting better
open-outcry n. 公開叫價
quaint adj. 古怪有趣的
sleek adj. 時髦的
pit n. 期貨交易場
Brent crude futures 北海布倫特 原油期貨
benchmark n. 基準點；可依照做出衡量和判斷的標準
liquidity n. 流動資金；資產折現力
West Texas Intermediate 西德州輕質原油
hedge fund 對沖基金
prop up v. 支撐, 支持
glitch n. 小故障，小毛病
lot n. 一批(在一起)拍賣的物品
viable adj. 可行的；可實施的
unsustainable adj. 無法維持的
headway n. 前進；進展
dabble v. (作為興趣或愛好)隨便搞搞, 涉獵
Although most other exchanges are heading in the opposite direction, in commodity markets such as the NYMEX, pressure from "locals"--self-employed traders--is helping to prop up open-outcry, although some reckon that customers pay up to five times as much as with electronic systems.
主體句式：pressure …is helping to prop up open-outcry
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