News

FMX Connect Expands Commodities Data

Author: Vicki Chan

Inside Market Data | 06 Aug 2010 | 20:32

Web-based energy and commodities data, research and analysis provider FMX Connect has closed a deal with 20 over-the-counter energy brokers to deliver the brokers' end-of-day trade data via its web-based platform, to support clients' trading decisions and portfolio valuations.

The brokers comprise over 30 percent of the volume over CME Group's Clearport clearing platform in natural gas and crude oil, and will provide FMX Connect with prices and volumes for swaps and options traded, as well as indicative bid and ask prices, to help traders determine the value of an option when it has not traded.

The vendor is currently testing sample data from the brokers, and plans to start making live data accessible via its platform in mid-October, and to add advanced analytics - including volatility and VWAP - by year-end, says FMX Connect co-founder Vince Lanci.

FMX Connect currently accesses settlement prices and trade volumes for OTC trades as collected and published by commodities exchanges such as the Chicago Mercantile Exchange and the InterContinental Exchange, and aggregates that information into a database that users - primarily energy traders - can search by commodity, type of instrument or volume amount, allowing them to easily retrieve the data they need.

This deal with the brokers will provide clients with more detailed tick data, which is typically hard to access given the opacity of such contracts that trade off-exchange in the OTC markets, Lanci says. The brokers will deliver the data to FMX Connect after the close of each trading day for the vendor to aggregate and organize in its searchable database, and incorporate into its charting displays.

The data can be used as an input to algorithms to find trading opportunities by clients-particularly hedge funds that may trade crude oil based on trading activity in other commodities. Having access to this data aggregated in one place makes it easier for them to find correlations that may lead to trades, Lanci says. The data will also enable FMX Connect to serve as an objective third-party source of information for firms to use to value their positions, particularly as regulators are demanding more transparent portfolio valuations, he adds.

Raising Research

Separately, the vendor recently took an equity stake in Cameron Hanover Research, a provider of energy research reports. FMX Connect initially served as a distribution portal for Cameron Hanover's reports, but is now the sole distributor of the firm's content, including fundamental and technical analysis of global energy markets. The vendors also plan to collaborate to expand the scope of Cameron Hanover's content, which may include hiring additional analysts to provide broader coverage of the energy markets as well as coverage of other commodities, Lanci says.