Dark Energy Consulting
Current course
Free Simple Glossary of Energy Trading terms
For more detailed explanations try the Detailed Glossary
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ETRM | ||
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Energy Trading and Risk Management - usually referring to a computer system that allows trades to be electronically recorded, and risk measures to be calculated For much more information please refer to the Detailed Glossary | ||
Book | ||
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A book is a collection of trades, usually grouped by a trading strategy For much more information please refer to the Detailed Glossary | ||
Position Reporting | ||
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Traders make, and lose, money by taking positions, either short or long at various points in the future Open positions in the future imply a risk that needs to be managed very carefully as changes in the forward curves affect the value of the net open position It is therefore critical that traders know their up to date position at all times This is the purpose of Position Reporting by means of Position Reports 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 | ||
Spot | ||
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A spot trade in general refers to a trade with immediate delivery. In energy trading terms it usually refers to a trade with delivery on the day it is executed (within day) or for the following day (day ahead) For much more information please refer to the Detailed Glossary | ||
P&L | ||
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Profit and Loss (P&L) is a finance and risk reporting term to describe the profitability of an individual trade, a book, a desk, or a company. Whilst the P&L of a company includes all activity, and costs (offices, staff etc.) the trading P&L is a measure of the profitability of a single, or a set of, trade(s) For much more information please refer to the Detailed Glossary | ||
Exchange | ||
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An Exchange is a trading organization which matches bids and offers on standardized contracts to form trades. Unlike a Broker the Exchange acts as the counterparty for the trades, and trading is anonymous For much more information please refer to the Detailed Glossary | ||
OTC | ||
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OTC - Over-The-Counter Generally used to refer to any trade not executed with an Exchange For much more information please refer to the Detailed Glossary | ||
Broker | ||
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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
For much more information please refer to the Detailed Glossary | ||
Confirmation | ||
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A Confirmation is a document describing a trade that has been executed, and is generally sent by the Seller to the Buyer to check the trade details, to be returned by the Buyer confirming that the trade details match the trade as they have recorded it The Confirmation, or Confirm, process allows both parties to agree the trade details For much more information please refer to the Detailed Glossary | ||