Thursday, 11 August 2022, 11:52 AM
Site: Dark Energy Consulting
Course: Free Simple Glossary of Energy Trading terms (Simple Glossary)
Glossary: Free Simple Glossary of Energy Trading terms
RISK
nick

Cascading

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

The process of decomposing longer tenor Exchange traded derivatives (futures and swaps) contracts for the equivalent shorter contracts

For much more information please refer to the Detailed Glossary

nick

Curve

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

Curve is a relatively general term  to describe a set of time series data, for example prices, interest rates, foreign exchange rates (FX), volatilities etc.

For much more information please refer to the Detailed Glossary

nick

Delta

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

At its simplest the delta of a trade or position is the ratio of its change in value to the change in value of its underlier 

For much more information please refer to the Detailed Glossary

nick

Delta Hedge

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

To offset the delta of an option or other non-linear trade, usually with a linear derivatives position

For much more information please refer to the Detailed Glossary

nick

Discounting

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

Calculation of the present day value of a cash flow that will or might occur at some time in the future

For much more information please refer to the Detailed Glossary

nick

Exposure

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

Exposure is the sensitivity of the value of a trade, or a portfolio, to some market variable

A single trade may have Exposure to multiple market variables, and we measure the Exposure to each variable separately. 

In general there is an Exposure to each independent market variable that determines the value of the trade

For much more information please refer to the Detailed Glossary

nick

Floating

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

A financial side or leg of a trade that is not fixed in advance, but is dependent on the value of some observable (usually an index) at a pre-agreed time related to the delivery date

For much more information please refer to the Detailed Glossary

nick

Gamma

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

Gamma is one of the market risk Greeks 

It measures the sensitivity of the Delta to an underlier or market value

It is of use when the value of the Delta itself varies with the value of the underlier - the Delta being the ratio of the value of the trade or portfolio to the value of an underlier or market value

For much more information please refer to the Detailed Glossary

nick

Greek

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

The Greeks are a set of Market Risk measures, using Greek (or Greek-like) letters to measure sensitivities of a trade or portfolio to the set of factors that affect the value of the trade or portfolio

For much more information please refer to the Detailed Glossary

nick

Hedge

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

To hedge is to offset, mitigate or reduce a risk or risks of an organization or individual by entering into contracts or trades

A hedge is a trade or contract intended at least partly to reduce risk

In Energy Trading the risk is usually market risk associated with other trades or contracts, or the operation of assets

For much more information please refer to the Detailed Glossary