Notice No. 01-86
March 8, 2001

TO:
ALL NYMEX DIVISION MEMBERS AND MEMBER FIRMS
ALL NYMEX DIVISION CLEARING FIRMS
ALL NYMEX DIVISION OPERATIONS MANAGERS

FROM:
Neal Wolkoff
Executive Vice President

SUBJECT:
MARGIN RATE CHANGE FOR BACK MONTH PALLADIUM FUTURES CONTRACTS

Effective Date:  Wednesday, March 14, 2001 (close of business).
Futures Contract: Palladium Futures.
Contract Months: All Months Subsequent to the March 2001 Contract Month (The
Margin For the March 2001 Contract, $50,000, Will Not Be Affected By This 
Rate Change).
Rate Change:

NYMEX Division Margins for Palladium Back Month Futures Contracts
Clearing Member (Maintenance Margin):  Old:  $50,000  New:  $5,000
Member Customer (Initial Margin):  Old:  $55,000  New:  $5,500
Non-Member Customer (Initial Margin):  Old:  $67,500  New:  $6,750

Current systems calculate the margin requirement for spread positions by 
first determining the "Scan Risk" and then multiplying the number of spreads 
by a rate set by the Exchange.  Scan Risk is determined by netting the 
outright margin required for each leg of a spread.  Note the outright margin 
level required for the March 2001 contract, and all subsequent contracts 
differ.  Spreading between differently margined contracts results in a higher 
spread margin than between equally margined contracts.  Below is provided an 
example where the legs of a spread are margined differently.

Example at Clearing Member Rates
A spread consisting of one leg in the March 2001 contract and another in the 
April 2001 contract (or any subsequent month) will have its requirement (at 
the clearing member rates) calculated at $45,500 starting on Wednesday, March 
14, 2001.

One Long March 2001 PA   (1 * $50,000) =    $50,000
One Short April 2001 PA   (1 * $5,000) =   -$5,000
Net Scan Risk    ($50,000-$5,000)=    $45,000
Spread Rate    (1* $500) =   +$500
Total Requirement            =    $45,500
Summary of NYMEX Division Margins on Palladium Futures Spreads
All Spreads With One Leg in the March 2001 Contract
Clearing Member (Maintenance Margin): $45,500
Member Customer (Initial Margin): $50,050
Non-Member Customer (Initial Margin): $61,425

Spreads Between All Contract Months Subsequent To the March 2001 Contract

Clearing Member (Maintenance Margin): $ 300
Member Customer (Initial Margin): $ 330
Non-Member Customer (Initial Margin): $ 405

Should you have any questions regarding these changes, please contact Arthur 
McCoy at (212) 299-2928 or Joe Sanguedolce at (212) 299-2855.  This notice 
supersedes all previous notices regarding outright margins for the NYMEX 
Palladium Futures Contract.




__________________________________________________
Please click on the link below to indicate you have received this
email.

"http://208.206.41.61/email/email_log.cfm?useremail=sara.shackleton@enron.com&
refdoc=(01-86)"

Note: If you click on the above line and nothing happens, please copy
the text between the quotes, open your internet browser,
paste it into the web site address and press Return.