Intercontinental Exchange Inc. (ICE), the operator of the New York Stock Exchange, is collaborating with crypto exchange operator OKX to introduce innovative oil futures contracts with no expiration date. This move aims to integrate traditional commodities with digital trading platforms and is positioned to reshape how oil futures are traded in the digital landscape.
The new perpetual contracts will utilize ICE’s futures pricing for Brent crude and West Texas Intermediate (WTI) as a benchmark on OKX’s platform. These contracts will be available in regions where OKX is already licensed to operate perpetual futures, expanding access to a broader audience of traders.
Haider Rafique, global managing partner at OKX, emphasized the importance of oil markets to the global economy, stating that bridging the gap between traditional and digital markets is crucial based on market demand. He noted that employing ICE’s benchmarks in regulated perpetual futures aligns with the desires of market participants.
Perpetual futures, commonly referred to as “perps,” differ from traditional futures in that they do not have an expiration date. This allows traders to speculate on the prices of various assets, including oil and cryptocurrencies, without the need to physically hold the underlying commodities or manage the complexities of rolling over contracts as they approach expiration.
The catalyst for the rise of perpetual futures in various asset classes arose after their initial use primarily in crypto markets. This trend has accelerated with the frequency of substantial news impacting asset prices over weekends, which enabled traders to react in real time beyond typical market hours.
Nonetheless, the majority of perpetual products have been offered through offshore exchanges and lack the regulatory oversight that is commonplace among traditional commodity exchanges like ICE and the CME Group. Michael Selig, chair of the Commodity Futures Trading Commission (CFTC), has expressed intentions to bring such products under regulatory scrutiny in the near future.
The proliferation of crypto exchanges is evident, as companies like Hyperliquid are already offering contracts tied to real-world assets such as crude oil. In light of this, established entities like CME and ICE have been advocating for regulatory intervention to manage the operations of newer exchanges like Hyperliquid.
This partnership between ICE and OKX is further showcased by their previous agreement in March, highlighting a collaborative effort to develop technology and blockchain networks. This initiative aims to grant ICE’s clients the ability to access crypto-based futures, while simultaneously allowing OKX users to trade tokenized securities on the NYSE platform.
As both firms strive to bridge the gap between traditional financial systems and emerging digital markets, this innovative approach could potentially attract a new wave of traders. Trabue Bland, senior vice president of futures exchanges at ICE, remarked that the new perpetual contracts leveraging ICE’s data enable OKX’s substantial retail trader base—estimated at 120 million—to engage with energy benchmark products, marking a significant development in the trading landscape.
