CME Group’s Micro Henry Hub futures and options to provide energy traders with new flexibility

CME Group is getting ready to introduce Micro Henry Hub features and options, which will further enrich its already wide array of financial products.

The Group said that the Micro Henry Hub features and options contract will grant additional flexibility to options and futures contracts traders, allowing them to manage their exposure to natural gas precisely.

Micro Henry Hub is set to offer micro contracts, which are scheduled to be released in a little over a month from now, on November 6. The company still awaits regulatory reviews and the green light to enter the final stage of launch, but the preparations have largely been made.

Once live, the contracts will be just one-tenth of the size of the Henry Hub futures and options — the Group’s main offering. The reduced size will act as a more accessible entry point for investors, so it is likely that the Group will see a surge in new customers, as well.

Henry Hub sees a 14% volume boost YoY

The main advantage of the micro contracts is high precision regarding the exposure to natural gas that global energy traders will get to experience. According to CME Group’s Global Head of Energy and Environmental Products, Peter Keavey, the Micro Henry Hub launch comes at a crucial point in time, just as the importance of Henry Hub as a global benchmark continues to rise.

The Group has seen strong growth in trading activity tied to Henry Hub futures, with an average daily volume rising by 14% on a YoY basis. In addition, trading volume from outside the US has gone up by 3% in 2023, representing 21% of the total volume recorded by the company. There has even been a 16% surge in open interest compared to the previous year.

CME Group has been committed to offering accessible yet cost-effective solutions, and micro contracts certainly align with this goal. Interactive Brokers’ EVP of Marketing and Product Development, Steve Sanders, said: “We are pleased to offer these products alongside other micro futures and options contracts, which continue to be a popular way for our active trader clients to manage their exposure with less upfront commitment.”

Micro Henry Hub futures and options to see listing on NYMEX

Thanks to the upcoming product, CME Group will be able to maintain its position as the most efficient and liquid marketplace for natural gas options. While Henry Hub itself has seen a remarkable surge, micro contracts are likely to attract even more business to the platform.

The Group noted that micro futures and options contracts will be listed on the New York Mercantile Exchange (NYMEX), meaning that they will be in full compliance with the exchange’s rules. This will only serve to further confirm their reliability and credibility.