October 4, 2000
Notice 00-344

Implied Bid or Offer Functionality Returns to NYMEX ACCESS

Effective Sunday evening, October 8, 2000 (trade date October 9, 2000), the  
NYMEX ACCESS electronic trading system will begin  offering implied trading 
functionality, pending approval of necessary rule changes by the Commodity 
Futures Trading Commission.  This  feature will once again create "implied"  
bids and offers in all futures, intra-market calendar spread, and 1:1 
inter-commodity spread markets based on orders in related markets.

Implied Orders in General
Implied bids and offers are generated by the system based on individual 
contract or spread orders that have been entered into the system.  For 
example, if someone places a spread order to buy heating oil and sell crude 
oil at a set differential, the system will automatically seek the best offer 
to sell heating oil and the best bid on crude oil and create an implied bid 
in heating oil and an implied offer in crude oil, based on the differential 
to the other market.  To do this, the system examines the outright  orders 
(orders directly entered into the system) and creates bids and offers  that 
are implied by the combination of specific outright orders.  The system then 
creates the "implied" bid or offer and displays it as an order that may be 
traded against.  If a trader trades against this implied order, then the 
outright orders that combined to create the implied order will trade.

Two-Way Implication Between the Futures and the Spread Markets
Orders entered into a commodity,s outright futures market will combine to 
create implied spread orders both as calendar spreads and  1:1 
inter-commodity spreads .  The reverse is also true, i.e., orders entered 
into the calendar spread market or the 1:1 inter-commodity spread market can 
combine with other futures orders to create implied futures orders.

Implied Spread Orders Generated from Other Spread Orders
Implied spread orders can be created from the combination of other spread 
orders.  For example, two separate calendar spread orders, one to buy a 
January contract and sell a February contract, and another to buy a February 
contract and sell a March contract, will create an implied order for a buy 
January/sell March spread.  The system will also generate implied 
inter-commodity spread orders from the combination of calendar spread orders 
and other inter-commodity spread orders, and it will generate implied 
calendar spread orders from the combination of inter-commodity spread orders 
and other calendar spread orders.

Implied Order Creation and the Depth-of-Market
Implied orders will be displayed only if the implied order,s price is the 
best price in the market.  Consequently, a particular market,s best price 
volume may be composed of outright volume, implied volume, or a combination 
of outright and implied volume.  The depth-of-market view of a contract will  
only show this combination of implied and outright volume at the contract,s 
BEST bid and offer prices.  Implied orders with prices that are NOT at the 
best price for a contract will NOT show in the depth-of-market view.

Please note that although the depth-of-market will not display volume from 
implied orders at prices other than the best, if a sweep order (an order to 
purchase a certain number of contracts within a predetermined price range) is 
entered with a price that would trade through  the undisplayed implied order, 
the implied order will be filled.

Color Scheme to Distinguish Between Outright and Implied Orders
If the volume of the best bid or offer is due completely to outright orders, 
then the color  will be displayed in BLACK font.  If the volume of the best 
bid or offer is due completely to implied orders, then the color  will be 
displayed in RED font.  If the volume of the best bid or offer is a 
combination, then the color  will be displayed in PURPLE font. (Warning: Do 
not change the Bid or Ask Color price cells -- which is done in the <View> 
<Preferences> <Attributes> screen --to the same colors that appear in the 
Implied Prices (Full) and (Part) fields -- also located in the same <View> 
<Preferences> <Attributes> screen.  If you do, you will not be able to view 
the implied prices.)

Cross Orders Must Be Turned Off
The current version of the implied functionality requires that cross order 
entry be turned off.  Therefore, there is no ability to directly enter a 
cross order (a single order for a trade to be transacted for two customers 
accounts by the same broker) into the NYMEX ACCESSc system (This 
functionality is planned as a future enhancement).  Orders should be entered 
in the order received from the customers.  If you have two orders in hand 
that would normally be entered as a cross order, you should enter the order 
received first, wait ten seconds, and then enter the order received second.

Options Orders
This release does not support implied options orders in any options market.

More Information
If you have additional questions concerning the implied market functionality, 
please call the NYMEX ACCESSc Control Center (NACC) at 1-800-438-8616 US, 
0800-89-0813 (UK), or 212-299-2670 (Far East).  The NACC can provide you with 
a more descriptive document concerning the implied functionality and answer 
any questions that you may have.


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