Nasdaq OMX Group Inc. will soon start clashing with energy-trading giants CME Group Inc. and Intercontinental Exchange Inc.
Nasdaq’s market for futures and options on oil, natural gas and U.S. power contracts will open on July 24, according to a letter to customers.
The exchange wants to win business away from CME and ICE by undercutting them on price. That path won’t be easy, as highlighted by the list of failed upstart futures markets and look-alike contracts. Though the incumbent exchanges bristle at the suggestion, to many observers they enjoy monopoly-like control over their products. That keeps traders from going elsewhere to buy and sell similar contracts.
Nasdaq Chief Executive Officer Robert Greifeld said in March that trading on his impending market would cost about half as much as rivals’ fees.
Nasdaq started testing the exchange in May, said Magnus Haglind, the CEO of Nasdaq Futures.
“Now we’re going to allow for a couple of more weeks for trading firm testing and customer readiness,” Haglind said in an interview Monday.
When announcing the market in March, Nasdaq said trading firms including Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Virtu Financial Inc. had agreed to do business there.
“If the Nasdaq can create liquidity by being incredibly competitive with rates, I will trade it,” said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC. “If the rates are competitive they should get some serious liquidity.”
ICE spokeswoman Brookly McLaughlin and CME spokesman Michael Shore both declined to comment.