Dark Energy Consulting
Current course
Free Simple Glossary of Energy Trading terms
For more detailed explanations try the Detailed Glossary
All categories |
RISK |
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Cascading | ||
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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 | ||
Curve | ||
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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 | ||
Delta | ||
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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 | ||
Delta Hedge | ||
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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 | ||
Discounting | ||
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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 | ||
Exposure | ||
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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 | ||
Floating | ||
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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 | ||
Gamma | ||
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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 | ||
Greek | ||
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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 | ||
Hedge | ||
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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 | ||