Dark Energy Consulting
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Free Simple Glossary of Energy Trading terms
For more detailed explanations try the Detailed Glossary
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TRADING |
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Maturity | ||
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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 | ||
Megawatt | ||
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A Megawatt is a measure of energy per unit time
Abbreviation is MW Not to be confused with MWh For much more information please refer to the Detailed Glossary | ||
Megawatt hour | ||
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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 | ||
Offer | ||
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An Offer is a type of Order; a trader offers to sell a product or commodity at the Offer price For much more information please refer to the Detailed Glossary | ||
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 | ||
Order | ||
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An Order is an instruction sent to an Exchange or a Broker to execute a trade unconditionally, or when or if specific criteria are met For much more information please refer to the Detailed Glossary | ||
Origination | ||
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Origination - the negotiation and conclusion of bespoke contracts, and structuring of non-standard products to offer for sale For much more information please refer to the Detailed Glossary | ||
Party | ||
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A party is an organization, or part of an organization, which is legally involved in a trade For much more information please refer to the Detailed Glossary | ||
Physical | ||
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The attribute, or adjective, physical usually refers to trades and business process that results or involves in the physical delivery of energy or a commodity For much more information please refer to the Detailed Glossary | ||
Position | ||
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All physically settled derivatives imply either an obligation to deliver, or take delivery of, a commodity at a location at some time in the future The obligation to deliver a commodity is called a short position of that commodity at that location and time in the future The obligation to take delivery of a commodity is called a long position of that commodity at that location and time in the future For much more information please refer to the Detailed Glossary | ||