A broker acts as an intermediary in the trading process
Most energy execution brokers operate a trading platform, that allow Orders to be submitted on a variety of standardized trading Products or Instruments
When Orders are matched then a trade is executed, and the parties making the matched Bid and Offer are each notified that a trade has been executed
The trade is legally executed between the respective parties
There are three types of brokers commonly involved in energy trading:
  • Execution Brokers - usually operating an electronic platform - brokering OTC trades
  • Exchange Brokers - Act as broker for trading companies on Exchanges on which the trading organization is not a full member
  • Clearing Brokers - Clear trades executed on an Exchange on behalf of the trading organization
Generally all brokers charge a fee, usually based on the total volume of the trade

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