Owen Lau: Got it. Thank you very much.
Terrence Duffy: Thanks Owen.
Operator: Our next question is coming from the line of Ken Worthington with JPMorgan. Please go ahead.
Ken Worthington: Hi. Good morning. Thanks for taking the question. You registered to launch an FCM last year. Where does that application stand? And in the wake of the collapse of FTX, is launching an FCM, a priority or even still makes sense?
Terrence Duffy: Yes. Ken, I will take that. Listen, the FCM application that we launched is not exactly taking anybody away from their day job of following that process on the application. We are looking €“ and I am looking at a long-term market structure and what it’s going to look like. And I do believe, and I have said this, two congressional hearings prior to FTX’ collapse that if we are going to have a different market structure that we all need to participate and have things in place and rules in place in order to facilitate whatever the world is going to look like for tomorrow. Since none of us really know what the world is going to look like for tomorrow as far as what the FCM business is or not going to be, it was prudent for us to go ahead and get the application process in place.
As I have said and I have said publicly, we are unwavering. I am unwavering about our commitment for our FCM model today. Whatever we do going forward, I would hope if in fact, the model has to change, that we can work with our FCMs to bring them along so we can have a bigger piece of the pie for everybody to be successful. So, I wouldn’t read too much into that. But when you are in a situation where the government appeared to be willing to approve technically a direct model without writing rules to the direct model and applying rules that were written back many, many years ago that are applicable only to the FCM model made no sense to us. So, I had to be prepared, along with my team in order to put certain things in place, just in case that was the decision of our government.
I don’t believe that’s the case. I think there will be new rules. You heard Commissioner Johnson or you may have seen, in her public remarks from Duke University about wanting to write rules as it relates to a direct model, even if it comes forward. That is a very long, difficult process to write rule. And I have been around this business for 40 years, and I have been in Washington helping write rules and participated in the process. And it is very difficult to do. So, I don’t see that going anywhere soon. And €“ but for the same time, the FCM is nothing more than €“ it’s a wait and see for what the future may or may not bring. And there is nothing more to it than that can.
Ken Worthington: Great. Thank you very much.
Terrence Duffy: Thank you.
Operator: Our next question is coming from the line of Craig Siegenthaler with Bank of America. Please go ahead.
Craig Siegenthaler: Hey. Good morning everyone. I have a follow-up to an earlier question, but I wanted to hone in on energy specifically. So, now that your margin requirements have been declining and especially in energy, what has been the early feedback? And how much of a positive impact do you think this could have on volumes?
Terrence Duffy: Derek?
Derek Sammann: Yes. Thanks Craig. And as I mentioned before, we are in the process of seeing this market normalize. Now, the first thing we saw when you saw the disruptions of the Ukraine war happened last year, margins popped up. That did basically deleverage the number of financial fitters in the market may pull back. We did not see commercial participants step away because that risk continued to be sitting there on their books. I think as we have seen margins normalize, that’s one part of the overall equation. We certainly have seen, as I mentioned, the open interest trends turned very positively. As I said, our open interest in WTI right now versus end of last year is up 28%. On the nat gas side, we are seeing similarly open interest is up about 10% from the beginning of Q4 last year.
And the most important marker there is look at the open interest holders and the types of those customers coming back in. Our large open interest holders in natural gas have also grown up about 17% up to just about 420 versus the beginning of Q4. So, as we suspected, increased cost to transact, increased margin tends to initially push financial customers out, we have seen index trackers, retail in the form of micros start to come back. And that will be a process, and we see that reflected initially both in the large open interest holders as well as growth and rebuild of open interest. And more importantly, structurally, as I mentioned, we like our position in WTI and Henry Hub as the central points and being the largest export market in both of these products and setting the global price of both natural gas and oil globally.
So, those are the markets we are seeing right now. That will be a slow build, but we like the trajectory this is on going into this year.
