Thursday, 28 March 2024, 2:14 PM
Site: Dark Energy Consulting
Course: Free Simple Glossary of Energy Trading terms (Simple Glossary)
Glossary: Free Simple Glossary of Energy Trading terms
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nick

Margining

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

Margining is a form of Settlement, whereby exposure to Credit Risk between two parties is limited by keeping the overall Credit Exposure below a certain threshold by means of Margin payments between the parties whenever the threshold is breached

For much more information please refer to the Detailed Glossary

nick

Mark to Market

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

A way of valuing the unrealized P&L of a simple linear Forward, Futures contract or Swap

For much more information please refer to the Detailed Glossary

nick

Market

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

In Energy Trading a Market describes a standardized trading environment for a commodity and a geographic zone

The geographic zone is not necessarily the delivery location, but usually determines the valuation of the traded commodity

For example API#2 is a market based on the published index for coal in the Amsterdam, Rotterdam and Antwerp (ARA) location; a trade may deliver coal to a port in France but still be part of the API#2 market

For much more information please refer to the Detailed Glossary

nick

Market Maker

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

A market maker quotes prices at which they are prepared to buy or sell a commodity - usually on an Exchange or with a broker

For much more information please refer to the Detailed Glossary

nick

Master Agreement

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

When two parties execute a trade between themselves they specify the terms of the trade: Price, Volume, Location, timing etc.

But in order to successfully manage the trade's delivery and settlement a lot more information needs to be available than is captured in the trade details, such as when payment is due, who needs to notify a TSO etc.

This additional detail is held in a Master Agreement

Each trade that is executed is regulated by a Master Agreement

For much more information please refer to the Detailed Glossary

nick

Maturity

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

Generally a financial trading term used sometimes in the commodities trading market to mean the expiry or expiration date - particularly futures contracts

For much more information please refer to the Detailed Glossary

nick

Megawatt

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

A Megawatt is a measure of energy per unit time

  • in this case one million joules per second
  • one watt being one joule per second

Abbreviation is MW

Not to be confused with MWh

For much more information please refer to the Detailed Glossary

nick

Megawatt hour

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

A measure of energy - abbreviated to MWh

Equivalent to one Megawatt of power flowing for one hour

For much more information please refer to the Detailed Glossary