Science Fair Project Encyclopedia
New York Mercantile Exchange
The New York Mercantile Exchange (NYMEX) is the world's largest physical commodity futures exchange located in New York City. Its two principle divisions are the New York Mercantile Exchange and the New York Commodities Exchange (COMEX) which were once independent companies but are now merged.
The New York Mercantile Exchange handles billions of dollars worth of energy products, metals, and other commodities being bought and sold on the trading floor and the overnight electronic trading computer systems. The prices quoted for transactions on the exchange are the basis for prices that people pay for throughout the United States and the World.
The New York Mercantile Exchange, Inc. is a private company which plays a vibrant role in the commercial, civic, and cultural life of New York and supports thousands of jobs. The floor of the NYMEX is regulated by the Commodity Futures Trading Commission, an independent agency of the United States Government. Each individual company that trades on the exchange must send their own independent brokers. Therefore, a few employees on the floor of the exchange represent a big corporation and the exchange employees only record the transactions and have nothing to do with the actual trade.
On February 26, 2003, The New York Board of Trade (NYBOT) signed a historic lease agreement with the NYMEX to move into its World Financial Center headquarters and trading facility after the NYBOT's original headquarters and trading floor was destroyed in the September 11, 2001 Terrorist Attacks on the World Trade Center. 
After the terrorist attacks, the NYMEX has built a $12 million trading floor backup facility on Long Island with 700 trader's booths, 2,000 telephones, and a backup computer system. This expensive backup is needed in case of another terrorist attack on Lower Manhattan or a natural disaster. 
History of the exchange
Commodity exchanges began in the middle of the 19th century, when businessmen began organizing market forums to make buying and selling of commodities easier. These marketplaces provided a place for buyers and sellers to set the quality, standards, and establish rules of business. By the late 1800s about 1600 marketplaces had sprung up at ports and railroad stations. In 1872, a group of Manhattan dairy merchants got together and created the Butter and Cheese Exchange of New York. Soon, egg trade became part of the business conducted on the exchange and the name was modified to the Butter, Cheese, and Egg Exchange. In 1882, the name finally changed to the New York Mercantile Exchange when opening trade to dried fruits, canned goods, and poultry. As centralized warehouses were built into principal market centers such as New York and Chicago in the early 20th century, exchanges in smaller cities began to disappear giving more business to the exchanges such as the NYMEX in bigger cities. In 1933, the COMEX was established through the merger of four smaller exchanges; the National Metal Exchange, the Rubber Exchange of New York, the National Raw Silk Exchange, and the New York Hide Exchange. On August 3, 1994, the NYMEX and COMEX finally merged under the NYMEX. Now, the NYMEX operates in a state of the art trading facility and office building with two trading floors in the World Financial Center in downtown Manhattan.
The official address of the NYMEX headquarters and trading facility is One North End Avenue, New York, NY 10282-1101. The company have additional offices in Houston, Washington D.C., London, and Hong Kong.
Commodities traded on the exchange
- Crude oil
- Heating oil
- Natural gas
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