The Intercontinental Exchange (ICE) just announced that they are acquiring YellowJacket Software. As I’ve talked about in the past, YellowJacket is provider of what I consider to be one of the best applications for traders to expand their market reach. Using YellowJacket’s application, you can utilize instant messaging to reach multiple counterparties simultaneously, creating an auction for your position. Once you’re satisfied with the bid or offer, you can execute the deal and the system can move that consumated transaction to your internal ETRM systems. Basically, it gives you the power to create your own fully integrated commodity exchange through instant messaging.

YellowJacket has been moving toward the OTC financial energy markets recently, seeking to create more liquidity and transparency in what has otherwise been a fairly dark market, controlled almost exclusively by brokers.

It’s clear that ICE viewed YellowJacket a having the potential to start to infringe on their markets as well. The exchange-like capabilites of YellowJacket are transportable to any market. So, by owning YellowJacket, ICE can control their movements and at the same time, offer additional functionality to their current markets.