Trevor Rose Podcast
#160: Joe Raia (Abaxx Technologies) - Building a New Commodities Exchange, Futures Contracts & LNG: The Investment Case in Plain Sight
Feb 8, 2024
Joe Raia, Chief Commercial Officer of Abaxx Commodities Futures Exchange and Clearinghouse, discusses building a new commodities exchange, futures contracts, and the investment case for LNG. They explore the importance of overseeing speculators in commodity markets and the need for a physically deliverable contract in the LNG market. Additionally, they discuss the value chain in the commodities market and the potential of using technology to improve collateral utilization.
44:18
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Quick takeaways
- ABAC's Communities Futures Exchange aims to introduce physically deliverable LNG futures benchmarks, filling the gap and providing a tool for managing risk and price discovery in the growing LNG market.
- ABACS Technologies operates as a publicly traded company, offering a regulated clearing and exchange platform for futures contracts, with a high-margin business model built on extensive risk management tools.
Deep dives
The Importance of Futures Contracts in Commodity Markets
Futures contracts have been instrumental in managing risk and hedging in commodity markets since their inception. These contracts allow farmers, refiners, and other commodity producers to lock in prices for their products, protecting them from fluctuations in input costs and output prices. Traditionally, futures exchanges like CME and NYMEX have facilitated these trades, but the absence of a physical benchmark for LNG has hindered the market. ABAC's Communities Futures Exchange aims to fill this gap by introducing three physically deliverable LNG futures benchmarks. These benchmarks will provide a crucial tool for managing risk and price discovery in the rapidly growing LNG market.
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