Free Simple Glossary of Energy Trading terms

An Energy Swap is generally a swap of two different prices on an identical, or similar, Energy underlier

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Also known as a swing option, a swing contract is a type of contract that allows the buyer the option, but not the obligation, to take periodic deliveries of a product at a volume nominated by them between a minimum and a maximum volume at an agreed price

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A type of supply contract in which the buyer commits to buying a minimum quantity of some product, or to make an alternative payment for the amount below the minimum quantity

Take or Pay contracts are widely used in the Gas and Oil markets

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Usually used in the context of Natural Gas - an entry or exit point into a regional gas network or National Transmission System

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The value of options varies with time, in general the uncertainty in the price of the underlier reduces as the moment of exercise approaches. Theta is the measure of how much the value of a trade, or set of trades, varies with time

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A general term used to describe an agreement in which one party (the toller) provides an input product to the other party, and the other party provides another product (usually derived from the input product) in return

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A trade is a legally binding contract between two parties

A physically settled trade requires one party to deliver one or more commodities to the other party at a time and location specified in the trade terms, in return for one or more cash payments

A financially settled trade requires both parties to agree the value of one or more underliers, and make one or more cash payments dependent on those values

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A type of Futures contract that is physically delivered and settled at the exchange closing price of the contract

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Something physical or tangible that may be referenced by a contract or trade

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A term principally used in oil and gas context - covering the search for new reserves, exploratory activities, construction of new extraction facilities, and the running of those facilities

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