A lot of capital markets infrastructure — call it digital plumbing — goes into trading financial instruments. Many transactions that used to be done by an open outcry system are now fully electronic. In this vein, the IntercontinentalExchange (ICE) said Thursday that it has agreed to purchase a company whose technology facilitates the trading of energy derivatives, YellowJacket Software. From securitiesindustry.com: … New York-based YellowJacket, founded in 2002, operates the YJ Energy platform, a peer-to-peer trading network for over-the-counter natural gas, power, crude oil and weather products. It has a particularly strong presence in weather derivatives, 80 percent of which are traded on YJ Energy, according to YellowJacket.
“Our proven platform supports the negotiation of any energy transaction, any complexity of contract, with any qualified counterparty,” said YellowJacket co-founder and president Jacob Pechenik. “We will continue to grow the distribution of our technology and liquidity on our network by leveraging ICE’s vast global distribution, asset-class diversity and customer base.” He added in an interview, “YellowJacket is now part of a network and we are going to get that network effect.”