Natural Gas Exchange for Futures for Swaps (EFS) -- Flett Exchange Electronic EFS Platform Helps Hedgers and Market-Makers

Flett Exchange, LLCs’ EFS platform was designed by members of the group who pioneered EFS trading in Natural Gas Futures, Flett Futures, Inc. Flett Futures, Inc led the way with EFS trading starting in 2002 while performing arbitrage between the NYMEX Henry Hub contract on the Floor and the ICE Henry Hub electronic Swap. We have witnessed the evolution of screen to pit arbitrage to pure electronic arbitrage. Along with this transition the EFS opportunity has moved further out on the curve. What has remained consistent is the need for counterparties to offset positions with each other. This can be done on the Flett Exchange Screen, via voice broker or direct between parties.

The Flett Exchange electronic screen provides the transparency demanded by hedgers and market-makers alike. This screen can handle thousands of transactions per day and is housed in a Tier 1 data center for maximum security and reliability.

Market-makers and hedgers will realize the expanded outreach to more participants outside their voice brokers and direct market contacts. Flett Exchange will, through its industry contacts, bring parties with offsetting positions together to help mitigate exposure while helping to afford more trading opportunities.

Risk managers must be aware of the positions of swap to futures and have a mechanism to manage this risk on a day-to-day basis and also in the time of crisis. Swap to futures positions consume large amounts of capital in the form of margins while at the same time leaving open risk for a physical to financial decoupling in the event of force majeure in the underlying commodity.