Trading and pricing for delivery the next day

Detail

Day Ahead and Within Day trading is responsible for the vast majority of gas and power trades executed

The Day Ahead Market (DAM) is used by

Operations/logistics teams to balance supply to demand

Speculative traders to make money out of the massive liquidity in Day Ahead trading

Day Ahead trading may be executed in the normal ways:

Bilaterally with a counterparty

OTC through a broker platform

In addition there are specialist Spot Exchanges that offer a wide range of within day and day ahead products, traded in two main ways:

Continuous spot trading much like any other OTC or Exchange trading

Day Ahead Auctions - with a fixed close 

At the close of Day Ahead trading many Spot Exchanges publish Day Ahead Settlement prices based on the auctions and/or a particular trading period in the current day, or provide these prices to a third party who publish a Day Ahead settlement price

Day Ahead settlement prices are often used as tradable indexes for indexed or floating forwards. 

These Day Ahead settlement prices are often referred to as Day Ahead indexes