Option | ||
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At its simplest an energy option is an instrument that gives the buyer the right, but not the obligation, to buy, or to sell, a commodity at a specified price at some point in the future.
More complex options may be financially settled, the payout being dependent on some condition(s) being met, and varying with some observable value(s) at the time of exercise
There is usually a single non-refundable payment made by the buyer of the option (the holder) to the seller of the option (the writer) - this is the option premium
For much more information please refer to the Detailed Glossary | ||
Spot | ||
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A spot trade in general refers to a trade with immediate delivery. In energy trading terms it usually refers to a trade with delivery on the day it is executed (within day) or for the following day (day ahead) For much more information please refer to the Detailed Glossary | ||
Spread | ||
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A spread is a difference in price, or value, of two similar but different underliers For much more information please refer to the Detailed Glossary | ||
Swap | ||
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An Energy Swap is generally a swap of two different prices on an identical, or similar, Energy underlier For much more information please refer to the Detailed Glossary | ||
Swing Contract | ||
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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 For much more information please refer to the Detailed Glossary | ||
Take or Pay | ||
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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 For much more information please refer to the Detailed Glossary | ||
Tolling Agreement | ||
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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 For much more information please refer to the Detailed Glossary | ||
Arbitrage | ||
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The difference in cost of achieving the same outcome through different means For much more information please refer to the Detailed Glossary | ||
Auto Trade Capture | ||
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Auto Trade Capture is a capability in most trading organizations (and many have an application called ATC) that allows trades executed on an electronic trading platform (usually exchange or broker) to be automatically downloaded to our organization's ETRM For much more information please refer to the Detailed Glossary | ||
Baseload | ||
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Term used in power (electricity) trading and operations to describe continuous delivery (24 hours a day, 365 days a year) For much more information please refer to the Detailed Glossary | ||