Free Simple Glossary of Energy Trading terms


For more detailed explanations try the Detailed Glossary




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nick

Fee

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

A fee is a cash payment which may be associated with:

  • A single trade
  • A group of trades
  • No specific trades

For much more information please refer to the Detailed Glossary

nick

General Ledger

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

A record of all financial transactions made by the company

For much more information please refer to the Detailed Glossary

nick

Carbon

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

Gas, oil and coal all contain carbon - when they burn the carbon is oxidized to carbon dioxide.

Carbon dioxide, as we all know, enters the atmosphere, and is generally believed to cause global warming

There are various schemes to reduce the emission of carbon dioxide, called emissions schemes, and these require major emitters of carbon dioxide to provide certificates matching their emission of carbon dioxide. These certificates may be acquired in a number of ways, and there is a market for organizations with surplus certificates to sell, and organizations who need more certificates, to buy

For much more information please refer to the Detailed Glossary

nick

Energy

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

The unhelpful sounding physics definition: Energy is the capacity of a physical system to perform work

We know energy: light, heat, electricity, kinetic (motional) energy, potential (the energy something gets when we lift it up) energy etc.

For much more information please refer to the Detailed Glossary

nick

Theta

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

The value of options varies with time, in general the uncertainty in the price of the underlier reduces as the moment of exercise approaches. Theta is the measure of how much the value of a trade, or set of trades, varies with time

For much more information please refer to the Detailed Glossary

nick

Realization

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

The p&l of trades (and cash flows) is described as:

  • Unrealized - delivery has not yet taken place, the value of the trade is determined by MtM, and the p&l varies each day with the market curve
  • Realized - delivery has taken place, the value of the delivered commodity is no longer relevant, and there is no uncertainty about the value of the trade

For much more information please refer to the Detailed Glossary

nick

Mark to Market

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

A way of valuing the unrealized P&L of a simple linear Forward, Futures contract or Swap

For much more information please refer to the Detailed Glossary

nick

Cash Flow

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

A payment that has been, or will need to be paid, on a particular date

For much more information please refer to the Detailed Glossary

nick

Greek

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

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

nick

Gamma

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

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


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