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The Gulf Coast gasoline futures contract gives market participants the opportunity to target their risk management coverage for gasoline traded on the Gulf Coast, the primary refining center. This region is essential to gasoline refiners and retailers because the Gulf Coast serves as one of two key trading centers in the cash market; the other being New York.
The Gulf Coast gasoline futures contract, coded LR, was launched to provide greater price transparency to the gasoline market. It features physical delivery of M-grade conventional gasoline into the Colonial Pipeline ratably in increments of 25 contracts during each cycle of the delivery month. Delivery takes place following termination of trading. The final settlement price is based on the average-weighted price of trades done in the closing range on termination day. Delivery shall be made F.O.B. the Colonial Pipeline at the injections station selected by the Seller at Pasadena, Texas; Houston, Texas; Hebert, Texas; Port Arthur, Texas; Lake Charles, Louisiana; Krotz Springs, Louisiana; Baton Rouge, Louisiana; Collins, Mississippi,; and Moundville, Alabama.
The contract is dually listed on the trading floor and CME Globex® electronic trading system. It trades in 42,000-gallon lots. |
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