With its commitment to open outcry trading, the New York Mercantile Exchange (Nymex) has a special love for the clear tones of shouting traders, so its telephones are close to its heart. But while opinion about the suitability of the latest telephony technology, the Voice over Internet Protocol (VoIP), has been vacillating between whether to adopt it or not within financial institutions, Nymex is holding firm in ruling out the possibility of using the technology for now.

When Nymex officials opted for a digital voice network to replace the legacy V Band analog turret system, they explicitly opted out of using VoIP for the more than 700 trading turret positions.

According to John Barbara, director of telecommunications for the IS department of Nymex, the exchange chose the BT ITS voice trading system over a similar offering from rival IPC Information Systems. The exchange was looking for a turret to support eight handsets, a configuration the traders on the Nymex floor preferred.

"Both BT and IPC came up with a four-handset solution, so we put two four-handset turrets in each booth. That gave them the eight handsets. In looking at the design of both solutions, we felt that the BT solution was more desirable," Barbara says. IPC officials decline to comment. IPC acquired V Band Corp. in 1999.

Nymex chose the BT ITS solution for its 450 trading position on the Nymex trading floor, where traders deal in energy, crude oil, gasoline, heating oil, natural gas markets and platinum group metals. Nymex also purchased and implemented 290 positions at its sibling Comex division, where traders deal in gold, silver, copper and aluminum.

In adopting the new platform, Nymex joins the ranks of trading firms that decline to trust and deploy VoIP on the trading floor. "Personally, I am not a proponent for VoIP. The technology is not quite there for a widespread trading floor environment. There are specific applications where it works, maybe in the back office but not for the trading floor," says Barbara.

Barbara says communications experts at other exchanges remain skeptical about VoIP on the trading floor, too. "I talk to counterparts at other trading floors and other exchanges and listen to what they do and what their experiences are. It seems no one who has implemented VoIP to date is happy. There are still doubts. It’s not a true clear voice, and that’s why for a trading floor, it’s not suitable," says Barbara. "Will it ever be there? Yes, probably, but it’s not there yet."

Although he cites persistent voice delays when testing VoIP solutions, he says Nymex will test a program for a virtual private line in the near future. "We always have to be looking at new technology," he says.

Nymex began converting the Nymex and Comex trading booths to the BT solution in February 2003, starting with the Comex floor. This was at the same time that the New York Board of Trade (Nybot) moved into the Nymex building and onto the same floor as the Comex. Barbara says that Nymex traders began converting to the BT solution in November 2003 and the move was finished last June.