Quick update on Abaxx Technologies (NEO: ABXX and OTCQX: ABXXF)

Just wanted to give a brief update on Abaxx Technologies on this beautiful Friday afternoon.

A link to my writeup on the business can be found here.

At the time of posting, Abaxx had not processed any trades or provided clearing services. Well, as of today, that has changed. Josh Crumb, Abaxx’s CEO, tweeted last night that the Abaxx Commodities Future Exchange and Clearinghouse is now open for business. One of the concerns I had about Abaxx, which I unfortunately forget to mention in my writeup, was that I didn’t understand why it was taking so long for trading and clearing to commence. I didn’t know if it was in some kind of regulatory hell or what, but it seemed like it was always edging towards being in business and then another issue or delay would happen.

That concern is now in the rear-view mirror. The article linked here provides the update on Abaxx’s business. Here are some highlights from the article:

• As of today, 6/28/2024, Abaxx has commenced trading of its physically deliverable liquified natural gas (LNG) and carbon futures contracts which are open for trading 14 hours a day Monday – Friday. It is still working on its nickel sulphate contract.

• There are five new centrally cleared, physically deliverable commodity futures contracts available for trading on its exchange and clearinghouse.

• It has two clearing members: StoneX and KGI Securities.

• Execution and broking services can be sourced from Marex, Eagle Commodities, Evolution Markets, Salamander Broking, SSY, TP ICAP, and Venture Commodities Partners.

The issue that comes into focus with the launch of the exchange and clearinghouse is trading volume. With all the work that the Abaxx team has done over the years, can it reach the critical mass required to become the main venue where physically deliverable LNG and carbon future contracts are traded and settled?

Increasing trading volumes will go a long way in answering this question as more trades and clearing lead to more revenue and hopefully fat margins. With that being said, I don’t know what the economics of each trade look like on the platform or how many trades need to be executed and processed per day/week/month for Abaxx to be profitable. Per Mr. Crumb’s tweet from about an hour ago, trading volumes not available to the public yet, but work is being done on a “cool, live curve page this summer/fall for Smarter Markets Members.” For now, we’ll just have to wait and see unfortunately. Regardless, opening for business is a very positive sign for Abaxx.

Thanks for reading as always and have a stellar weekend.

Disclosure: This is not investing advice. Please consult a financial professional when making any kind of investment-related decision. I do not own shares in Abaxx Technologies.