OTC History
The business of enabling commercial customers the ability to manage their energy risk exposure has been available to large players in the petroleum since the early 1980's. Traditionally, investment banks and merchant energy companies have dominated the energy swap market.

Market irregularities in California and the failure of some large merchant energy companies in recent years have had a significant and negative impact on energy markets and have increased demand for credit quality and market liquidity. In 2002, NYMEX responded by introducing a clearing mechanism called Clearport, which allowed counterparties to negotiate a trade, and then post for clearing at NYMEX for settlement in their respective FCM clearing accounts. Following the introduction of Clearport, a large volume of natural gas HHUB and basis swaps began clearing through NYMEX Clearport. Not long thereafter, crude oil, products and options were listed for clearing.

In 2003 several amendments in the Commodity and Futures Trading Commission (CFTC) regulations were made which opened up the OTC market to NYMEX trading firms like HCEnergy, which previously made markets for NYMEX floor traded products. With these changes, "over-the-counter" (OTC) products traditionally traded on a bilateral basis with banks and large energy firms could be offered to customers directly by Hudson Capital. Today, Hudson Capital can trade any NYMEX-cleared product with its customers provided they have a clearing account with a NYMEX clearing member.


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