Subject: FW: (01-406) EXCHANGE TO INTRODUCE HENRY HUB SWAPS; LARGE ORDER EXECU TION AND EXTENDED MONTHS IN NATURAL GAS FUTURES AND OPTIONS
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To: [email-masked], [email-masked]
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Date: Thu, 29 Nov 2001 12:26:28 -0800 (PST)

-----Original Message-----
From: 	Exchange Information <[email-masked]>@ENRON  
Sent:	Thursday, November 29, 2001 12:19 PM
To:	Exchange Information
Subject:	(01-406) EXCHANGE TO INTRODUCE HENRY HUB SWAPS; LARGE ORDER EXECU	TION AND EXTENDED MONTHS IN NATURAL GAS FUTURES AND OPTIONS

November 29, 2001
Notice No. 01-406

TO:		NYMEX DIVISION MEMBERS AND MEMBER FIRMS
		NYMEX DIVISION CLEARING MEMBERS

FROM:		J. Robert Collins, Jr., President

SUBJECT:	EXCHANGE TO INTRODUCE HENRY HUB SWAPS; LARGE ORDER EXECUTION
AND EXTENDED MONTHS IN NATURAL GAS FUTURES AND OPTIONS
____________________________________________________________________________
_____

The New York Mercantile Exchange, Inc., today announced an expanded slate of
natural gas products and services that it plans to introduce on an expedited
basis, including an electronically traded, cleared Henry Hub swaps contract
for the December 3 trading session, which begins with the NYMEX ACCESS

session on Sunday night, December 2; listings of additional natural gas
futures contracts as far as six years out beginning with the NYMEX ACCESS

session tonight; extended natural gas options contracts beginning with the
Monday open outcry session; and large order execution (LOX) in the first two
months of the natural gas futures contract also beginning tomorrow.

The contract specifications for the Henry Hub swaps contract will closely
parallel those of the Henry Hub futures contract other than it will be
financially settled, based on the final settlement price of the Henry Hub
futures contract.  The trading symbol will be NN.  Trading will begin at 7
PM Sunday night, with a pre-opening session beginning at 3 PM.

The Exchange currently lists the natural gas futures contract for 36
consecutive months and will list an additional 36 consecutive months
beginning tomorrow.  The Exchange currently lists 12 consecutive months of
natural gas options and eight additional quarterly contracts on a
March/June/September/December cycle, and, on Monday, will add 12 additional
quarterly contracts on the same cycle.  The Henry Hub swaps contract will be
available for the closest 72 consecutive months.

LOX will be permitted throughout the open outcry sessions, except during the
closing range. Under the new procedures, orders for a minimum of 250
contracts and a maximum of 5,000 contracts will be permitted outside of the
bid/ask spread for smaller trades, as long as the trade is within the
session's maximum price fluctuation limits.

Floor traders wishing to participate in a LOX market on behalf of a customer
or themselves must verbally submit a request for quote (RFQ) to an Exchange
employee, who will act as the LOX book holder, stipulating the delivery
month and number of contracts involved. The book holder will only recognize
initial responses that are for the full amount of the RFQ. Once a response
to the RFQ is formally recognized, the requesting member has 30 seconds to
react to the market.

There will be a $2.50 per contract charge for any RFQ that receives a
responding quote. If the RFQ results in a trade, the fee will be reduced to
$1.50 per contract.

Members trading for their own accounts may participate in a trade subsequent
to the initial response, but the member who first responded with the best
bid or offer for the large order will never receive less than a 50%
allocation of a completed trade.

In addition to formally recognizing the participants involved in a LOX
order, the book holder will be responsible for enforcing time limits,
maintaining records, and ensuring that trades with multiple responding
participants are allocated to the provisions in the rules.