Misplaced Pages

#90909

85-483: European Energy Exchange ( EEX ) AG is a central European electric power and related commodities exchange located in Leipzig , Germany. It develops, operates and connects secure, liquid and transparent markets for energy and related products, including power derivative contracts, emission allowances, agricultural and freight products. The EEX emerged as a result of a merger between LPX Leipzig Power Exchange and

170-417: A futures contract (sometimes called futures ) is a standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future, between parties not yet known to each other. The asset transacted is usually a commodity or financial instrument . The predetermined price of the contract is known as the forward price or delivery price . The specified time in

255-754: A broad range of CO 2 derivatives ( futures on EUA, CER, EUAA, and ERU) can be traded at the EEX-Derivatives market. The clearing and settlement of all exchange transactions are done by the European Commodity Clearing AG (ECC). ECC was founded in 2006 with the transfer of the EEX clearing activities to this subsidiary. Specialized in the physical delivery of energy products, ECC is a dedicated clearing provider for 10 exchanges: European Energy Exchange (EEX), EEX Asia, EPEX SPOT, Powernext, and Power Exchange Central Europe (PXE), as well as

340-402: A buyer and seller of a futures contract or an options seller to ensure the performance of the term of the contract. Margin in commodities is not a payment of equity or down payment on the commodity itself, but rather it is a security deposit. Return on margin (ROM) is often used to judge performance because it represents the gain or loss compared to the exchange's perceived risk as reflected in

425-433: A circuit from a component is defined to have a negative sign. Thus passive components have positive power consumption, while power sources have negative power consumption. This is called the passive sign convention . In the case of resistive (Ohmic, or linear) loads, the power formula ( P = I·V ) and Joule's first law ( P = I^2·R ) can be combined with Ohm's law ( V = I·R ) to produce alternative expressions for

510-404: A commodity or the owner of an asset or assets subject to certain influences such as an interest rate. For example, in traditional commodity markets , farmers often sell futures contracts for the crops and livestock they produce to guarantee a certain price, making it easier for them to plan. Similarly, livestock producers often purchase futures to cover their feed costs, so that they can plan on

595-449: A complete cycle of the AC waveform, results in net transfer of energy in one direction is known as real power (also referred to as active power). The amplitude of that portion of energy flow (power) that results in no net transfer of energy but instead oscillates between the source and load in each cycle due to stored energy, is known as the absolute value of reactive power . The product of

680-415: A daily basis, however, in times of high volatility, a broker can make a margin call intra-day. Margin calls are usually expected to be paid and received on the same day. If not, the broker has the right to close sufficient positions to meet the amount called by way of margin. After the position is closed out the client is liable for any resulting deficit in the client's account. Some U.S. exchanges also use

765-572: A loop of wire, or disc of copper between the poles of a magnet . For electric utilities , it is the first process in the delivery of electricity to consumers. The other processes, electricity transmission , distribution , and electrical energy storage and recovery using pumped-storage methods are normally carried out by the electric power industry . Electricity is mostly generated at a power station by electromechanical generators , driven by heat engines heated by combustion , geothermal power or nuclear fission . Other generators are driven by

850-402: A no-arbitrage setting when we take expectations with respect to the risk-neutral probability . In other words: a futures price is a martingale with respect to the risk-neutral probability. With this pricing rule, a speculator is expected to break even when the futures market fairly prices the deliverable commodity. The situation where the price of a commodity for future delivery is higher than

935-411: A percentage of the value of the futures contract, must be maintained throughout the life of the contract to guarantee the agreement, as over this time the price of the contract can vary as a function of supply and demand, causing one side of the exchange to lose money at the expense of the other. To mitigate the risk of default, the product is marked to market on a daily basis where the difference between

SECTION 10

#1732772313091

1020-444: A relationship can be summarized as: The convenience yield is not easily observable or measured, so y is often calculated, when r and u are known, as the extraneous yield paid by investors selling at spot to arbitrage the futures price. Dividend or income yields q are more easily observed or estimated, and can be incorporated in the same way: In a perfect market, the relationship between futures and spot prices depends only on

1105-420: A series of bad harvests. The Chicago Board of Trade (CBOT) listed the first-ever standardized 'exchange traded' forward contracts in 1864, which were called futures contracts. This contract was based on grain trading, and started a trend that saw contracts created on a number of different standardized futures contracts based on commodities , as well as a number of futures exchanges set up in countries around

1190-460: A shallow and illiquid market, or in a market in which large quantities of the deliverable asset have been deliberately withheld from market participants (an illegal action known as cornering the market ), the market clearing price for the futures may still represent the balance between supply and demand but the relationship between this price and the expected future price of the asset can break down. The expectation-based relationship will also hold in

1275-421: A source or a load, depending on the voltage and current through them. For example, a rechargeable battery acts as a source when it provides power to a circuit, but as a load when it is connected to a battery charger and is being recharged. If conventional current flows through the device in a direction from higher potential (voltage) to lower potential, so positive charge moves from the positive (+) terminal to

1360-517: Is a scalar since it is the surface integral of the Poynting vector . 2021 world electricity generation by source. Total generation was 28 petawatt-hours . The fundamental principles of much electricity generation were discovered during the 1820s and early 1830s by the British scientist Michael Faraday . His basic method is still used today: electric current is generated by the movement of

1445-421: Is called power factor and is a number always between −1 and 1. Where the currents and voltages have non-sinusoidal forms, power factor is generalized to include the effects of distortion. Electrical energy flows wherever electric and magnetic fields exist together and fluctuate in the same place. The simplest example of this is in electrical circuits, as the preceding section showed. In the general case, however,

1530-415: Is made and the account owner must replenish the margin account. On the delivery date, the amount exchanged is not the specified price on the contract but the spot value , since any gain or loss has already been previously settled by marking to market. To minimize counterparty risk to traders, trades executed on regulated futures exchanges are guaranteed by a clearing house . The clearing house becomes

1615-419: Is marked to market daily. If the margin drops below the margin maintenance requirement established by the exchange listing the futures, a margin call will be issued to bring the account back up to the required level. Maintenance margin A set minimum margin per outstanding futures contract that a customer must maintain in their margin account. Margin-equity ratio is a term used by speculators , representing

1700-480: Is operated by EPEX SPOT, a joint venture owned by German EEX AG and French Powernext SAS (its 100% subsidiary). Each day of the year, EPEX SPOT conducts day-ahead auctions for three market areas: Germany/Austria, France, and Switzerland. Physical delivery of power occurs the following day. EPEX SPOT also offers an intraday market for Germany, France, Belgium, the Netherlands, Luxembourg, Switzerland, Austria, and

1785-634: Is possible to trade CER futures on the EEX (Certified Emission Reductions) global emission credits in accordance with the Kyoto Protocol. On April 14, 2008, EEX and Eurex launched trading of options on EUA Futures. Since January 2010, EEX AG has run the auctioning of the emission allowances issued by the Federal Ministry of the Environment. All trading participants admitted to trading in emission allowances on EEX are able to take part in

SECTION 20

#1732772313091

1870-417: Is set by the exchange. If a position involves an exchange-traded product, the amount or percentage of the initial margin is set by the exchange concerned. In case of loss or if the value of the initial margin is being eroded, the broker will make a margin call in order to restore the amount of initial margin available. Often referred to as "variation margin", margin called, for this reason, is usually done on

1955-616: Is the most important form of artificial light. Electrical energy is used directly in processes such as extraction of aluminum from its ores and in production of steel in electric arc furnaces . Reliable electric power is essential to telecommunications and broadcasting. Electric power is used to provide air conditioning in hot climates, and in some places, electric power is an economically competitive energy source for building space heating. The use of electric power for pumping water ranges from individual household wells to irrigation and energy storage projects. Futures contract In finance ,

2040-410: Is transformed to other forms of energy when electric charges move through an electric potential difference ( voltage ), which occurs in electrical components in electric circuits. From the standpoint of electric power, components in an electric circuit can be divided into two categories: If electric current is forced to flow through the device in the direction from the lower electric potential to

2125-417: Is usually supplied to businesses and homes (as domestic mains electricity ) by the electric power industry through an electrical grid . Electric power can be delivered over long distances by transmission lines and used for applications such as motion , light or heat with high efficiency . Electric power, like mechanical power , is the rate of doing work , measured in watts , and represented by

2210-595: The Chicago Mercantile Exchange (CME) and these instruments became hugely successful and quickly overtook commodities futures in terms of trading volume and global accessibility to the markets. This innovation led to the introduction of many new futures exchanges worldwide, such as the London International Financial Futures Exchange in 1982 (now Euronext. liffe), Deutsche Terminbörse (now Eurex ) and

2295-497: The Tokyo Commodity Exchange (TOCOM). Today, there are more than 90 futures and futures options exchanges worldwide trading to include: Most futures contract codes are five characters. The first two characters identify the contract type, the third character identifies the month and the last two characters identify the year. On CME Group markets, third (month) futures contract codes are: Contracts expire after

2380-675: The futures exchange article. Trading on commodities began in Japan in the 18th century with the trading of rice and silk, and similarly in Holland with tulip bulbs. Trading in the US began in the mid 19th century when central grain markets were established and a marketplace was created for farmers to bring their commodities and sell them either for immediate delivery (also called spot or cash market) or for forward delivery. These forward contracts were private contracts between buyers and sellers and became

2465-407: The kinetic energy of flowing water and wind. There are many other technologies that are used to generate electricity such as photovoltaic solar panels. A battery is a device consisting of one or more electrochemical cells that convert stored chemical energy into electrical energy. Since the invention of the first battery (or " voltaic pile ") in 1800 by Alessandro Volta and especially since

2550-652: The Dutch Title Transfer Facility (TTF). EEX also offers a spot market for EU allowances . Since 2005, EEX has operated both spot and derivatives markets in emission allowances. EEX has offered trading of emission allowances on the basis of the EU Emissions Trading Scheme (EU ETS) since 2005. EEX currently runs a secondary market for continuous trading on a spot and derivatives basis for EU ETS allowances (EUA, EUAA) and Kyoto credits (CER, ERU). As of March 26, 2008, it

2635-639: The EUA auctioned off by Germany for the third emissions trading period in February 2012, and it was chosen as a cooperation exchange for the NER30 program of the European Investment Bank (EIB). As of April 30, 2012, emission allowances for the aviation industry (EU Aviation Allowances, or EUAA) will also be offered for trading. Furthermore, Futures on Emission Reduction Units (ERU) will be launched at

European Energy Exchange - Misplaced Pages Continue

2720-767: The Frankfurt-based EEX in 2002. Deutsche Börse Group 's derivatives business unit Eurex acquired the majority share in the EEX in March 2011. EEX AG is majority owned by Deutsche Börse. It holds shares in the following companies: EEX announced in 2017 that it had reached an agreement to acquire the US-based Nodal Exchange. [2] In 2020, the trading of electricity on the EEX Power Derivatives Market amounted to 6,456 TWh ( terawatt hours), compared with 5,830 in 2019. In

2805-485: The IMM added interest rate futures on US treasury bills , and in 1982 they added stock market index futures . Although futures contracts are oriented towards a future time point, their main purpose is to mitigate the risk of default by either party in the intervening period. In this vein, the futures exchange requires both parties to put up initial cash, or a performance bond, known as the margin . Margins, sometimes set as

2890-648: The RMS value of the voltage wave and the RMS value of the current wave is known as apparent power . The real power P in watts consumed by a device is given by ℘ = 1 2 V p I p cos ⁡ θ = V r m s I r m s cos ⁡ θ {\displaystyle \wp ={1 \over 2}V_{p}I_{p}\cos \theta =V_{\rm {rms}}I_{\rm {rms}}\cos \theta } where The relationship between real power, reactive power and apparent power can be expressed by representing

2975-477: The United Kingdom. The market, which operates continuously without exceptions, can be utilized to meet short-term electricity needs or to trade excess capacity. Participants can purchase electricity up to 45 minutes before each hour for that specific hour. Trading for electricity on the following day can start from 15:00. The ability to trade all day on the natural gas spot market was introduced in 2011. On

3060-427: The above variables; in practice, there are various market imperfections (transaction costs, differential borrowing, and lending rates, restrictions on short selling) that prevent complete arbitrage. Thus, the futures price in fact varies within arbitrage boundaries around the theoretical price. When the deliverable commodity is not in plentiful supply (or when it does not yet exist) rational pricing cannot be applied, as

3145-466: The amount of power that is dissipated: ℘ = I V = I 2 R = V 2 R {\displaystyle \wp =IV=I^{2}R={\frac {V^{2}}{R}}} where R is the electrical resistance . In alternating current circuits, energy storage elements such as inductance and capacitance may result in periodic reversals of the direction of energy flow. The portion of energy flow (power) that, averaged over

3230-558: The amount of their trading capital that is being held as margin at any particular time. The low margin requirements of futures results in substantial leverage of the investment. However, the exchanges require a minimum amount that varies depending on the contract and the trader. The broker may set the requirement higher, but may not set it lower. A trader, of course, can set it above that, if he does not want to be subject to margin calls. Performance bond margin The amount of money deposited by both

3315-522: The apparent power, when the current and voltage are both sinusoids with a known phase angle θ between them: (real power) = (apparent power) cos ⁡ θ {\displaystyle {\text{(real power)}}={\text{(apparent power)}}\cos \theta } (reactive power) = (apparent power) sin ⁡ θ {\displaystyle {\text{(reactive power)}}={\text{(apparent power)}}\sin \theta } The ratio of real power to apparent power

3400-425: The arbitrage mechanism is not applicable. Here the price of the futures is determined by today's supply and demand for the underlying asset in the future. In an efficient market, supply and demand would be expected to balance out at a futures price that represents the present value of an unbiased expectation of the price of the asset at the delivery date. This relationship can be represented as :: By contrast, in

3485-408: The asset to sell at the futures price. Convenience yields are benefits of holding an asset for sale at the futures price beyond the cash received from the sale. Such benefits could include the ability to meet unexpected demand, or the ability to use the asset as an input in production. Investors pay or give up the convenience yield when selling at the spot price because they give up these benefits. Such

European Energy Exchange - Misplaced Pages Continue

3570-410: The auction without any further preconditions regarding licensing. From the very beginning, this also included all trading participants taking part in the existing Eurex cooperation on the derivatives market. In addition, EEX also carries out the EUA auctions for other countries (Poland, Hungary). The European Energy Exchange (EEX) has won the tendering procedure for the transitory auctioning platform for

3655-423: The basis of market risk and contract value. Also referred to as performance bond margin. Initial margin is the equity required to initiate a futures position. This is a type of performance bond. The maximum exposure is not limited to the amount of the initial margin, however, the initial margin requirement is calculated based on the maximum estimated change in contract value within a trading day. The initial margin

3740-418: The buyer to each seller, and the seller to each buyer, so that in the event of a counterparty default the clearer assumes the risk of loss. This enables traders to transact without performing due diligence on their counterparty. Margin requirements are waived or reduced in some cases for hedgers who have physical ownership of the covered commodity or spread traders who have offsetting contracts balancing

3825-423: The currency in the interval before payment is received. However, futures contracts also offer opportunities for speculation in that a trader who predicts that the price of an asset will move in a particular direction can contract to buy or sell it in the future at a price which (if the prediction is correct) will yield a profit. In particular, if the speculator is able to profit, then the underlying commodity that

3910-583: The data reported. On September 2, 2014, the European Energy Exchange (EEX) launched its new transparency site. At www.eex-transparency.com, visitors can gain access to comprehensive fundamental data and relevant information for wholesale energy trading. The website is a further development of the existing platform "Transparency in Energy Market" and contains information about the capacity, utilization, and availability of facilities for

3995-437: The day that a particular delivery month of a futures contract stops trading, as well as the final settlement price for that contract. For many equity index futures and interest rate futures as well as for most equity (index) options, this happens on the third Friday of certain trading months. On this day the back month futures contract becomes the front-month futures contract. For example, for most CME and CBOT contracts, at

4080-452: The deliverable asset exists in plentiful supply or may be freely created, then the price of a futures contract is determined via arbitrage arguments. This is typical for stock index futures , treasury bond futures , and futures on physical commodities when they are in supply (e.g. agricultural crops after the harvest). However, when the deliverable commodity is not in plentiful supply or when it does not yet exist—for example on crops before

4165-402: The deliverable asset exists in plentiful supply or may be freely created. Here, the forward price represents the expected future value of the underlying discounted at the risk-free rate —as any deviation from the theoretical price will afford investors a riskless profit opportunity and should be arbitraged away. We define the forward price to be the strike K such that the contract has 0 value at

4250-412: The direction of the voltage periodically reverses, but the current always flows from the higher potential to the lower potential side. Since electric power can flow either into or out of a component, a convention is needed for which direction represents positive power flow. Electric power flowing out of a circuit into a component is arbitrarily defined to have a positive sign, while power flowing into

4335-544: The end of April. In March, EEX extended the futures on Certified Emission Reductions (CER) for all maturities of the third trading period. Participants on the EEX can trade power contracts (weeks, months, quarters, and years) up to 6 years in the future. The Power Futures are financially settled contracts, but they can be physically delivered in Germany, France, Austria, Belgium, the Netherlands, and Italy. Besides electricity and natural gas futures (market areas GASPOOL and NCG),

SECTION 50

#1732772313091

4420-544: The expected spot price is known as contango . Markets are said to be normal when futures prices are above the current spot price and far-dated futures are priced above near-dated futures. The reverse, where the price of a commodity for future delivery is lower than the expected spot price is known as backwardation . Similarly, markets are said to be inverted when futures prices are below the current spot price and far-dated futures are priced below near-dated futures. There are many different kinds of futures contracts, reflecting

4505-458: The expiration of the December contract, the March futures become the nearest contract. During a short period (perhaps 30 minutes) the underlying cash price and the futures prices sometimes struggle to converge. At this moment the futures and the underlying assets are extremely liquid and any disparity between an index and an underlying asset is quickly traded by arbitrageurs. At this moment also,

4590-399: The forerunner to today's exchange-traded futures contracts. Although contract trading began with traditional commodities such as grains, meat, and livestock, exchange trading has expanded to include metals, energy, currency and currency indexes, equities and equity indexes, government interest rates, and private interest rates. Contracts on financial instruments were introduced in the 1970s by

4675-468: The future when delivery and payment occur is known as the delivery date . Because it derives its value from the value of the underlying asset, a futures contract is a derivative . Contracts are traded at futures exchanges , which act as a marketplace between buyers and sellers. The buyer of a contract is said to be the long position holder and the selling party is said to be the short position holder. As both parties risk their counter-party reneging if

4760-446: The harvest or on Eurodollar Futures or Federal funds rate futures (in which the supposed underlying instrument is to be created upon the delivery date)—the futures price cannot be fixed by arbitrage. In this scenario, there is only one force setting the price, which is simple supply and demand for the asset in the future, as expressed by supply and demand for the futures contract. Arbitrage arguments (" rational pricing ") apply when

4845-534: The high risk trading instruments in the market. Stock market index futures are also used as indicators to determine market sentiment. The first futures contracts were negotiated for agricultural commodities, and later futures contracts were negotiated for natural resources such as oil. Financial futures were introduced in 1972, and in recent decades, currency futures , interest rate futures , stock market index futures , and cryptocurrency inverse futures and perpetual futures have played an increasingly large role in

4930-412: The higher, so positive charges move from the negative to the positive terminal, work will be done on the charges, and energy is being converted to electric potential energy from some other type of energy, such as mechanical energy or chemical energy . Devices in which this occurs are called active devices or power sources ; such as electric generators and batteries. Some devices can be either

5015-608: The increase in volume is caused by traders rolling over positions to the next contract or, in the case of equity index futures, purchasing underlying components of those indexes to hedge against current index positions. On the expiry date, a European equity arbitrage trading desk in London or Frankfurt will see positions expire in as many as eight major markets almost every half an hour. Exchanges implement strict limits on how much exposure an entity may have closer to expiration as an effort to avoid any volatility around final settlement. When

5100-406: The initial agreed-upon price and the actual daily futures price is re-evaluated daily. This is sometimes known as the variation margin, where the futures exchange will draw money out of the losing party's margin account and put it into that of the other party, ensuring the correct loss or profit is reflected daily. If the margin account goes below a certain value set by the exchange, then a margin call

5185-575: The letter P . The term wattage is used colloquially to mean "electric power in watts". The electric power in watts produced by an electric current I consisting of a charge of Q coulombs every t seconds passing through an electric potential ( voltage ) difference of V is: Work done per unit time = ℘ = W t = W Q Q t = V I {\displaystyle {\text{Work done per unit time}}=\wp ={\frac {W}{t}}={\frac {W}{Q}}{\frac {Q}{t}}=VI} where: I.e., Electric power

SECTION 60

#1732772313091

5270-407: The listing month. Therefore traders must roll over their positions into the next month code. Example: CLX14 is a Crude Oil (CL), November (X) 2014 (14) contract. Futures traders are traditionally placed in one of two groups: hedgers and speculators . Hedgers have an interest in the underlying asset (which could include an intangible such as an index or interest rate) and are seeking to hedge out

5355-405: The many different kinds of "tradable" assets about which the contract may be based such as commodities, securities (such as single-stock futures ), currencies or intangibles such as interest rates and indexes. For information on futures markets in specific underlying commodity markets , follow the links. For a list of tradable commodities futures contracts, see List of traded commodities . See also

5440-531: The negative (−) terminal, work is done by the charges on the device. The potential energy of the charges due to the voltage between the terminals is converted to kinetic energy in the device. These devices are called passive components or loads ; they 'consume' electric power from the circuit, converting it to other forms of energy such as mechanical work , heat, light, etc. Examples are electrical appliances , such as light bulbs , electric motors , and electric heaters . In alternating current (AC) circuits

5525-458: The overall futures markets. Even organ futures have been proposed to increase the supply of transplant organs. The original use of futures contracts mitigates the risk of price or exchange rate movements by allowing parties to fix prices or rates in advance for future transactions. This could be advantageous when (for example) a party expects to receive payment in foreign currency in the future and wishes to guard against an unfavorable movement of

5610-508: The partner exchanges HUPX, HUDEX, NOREXECO, SEEPEX, and SEMOpx. Furthermore, EEX and ECC provide the service of trade registration. This service enables the trading participants and the trade registration participants to conclude transactions through registration by mutual agreement or to have over-the-counter transactions registered. EEX operates "Transparency in Energy Markets," the neutral platform for energy market data that fulfills

5695-694: The position. Clearing margin are financial safeguards to ensure that companies or corporations perform on their customers' open futures and options contracts. Clearing margins are distinct from customer margins that individual buyers and sellers of futures and options contracts are required to deposit with brokers. Customer margin Within the futures industry, financial guarantees required of both buyers and sellers of futures contracts and sellers of options contracts to ensure fulfillment of contract obligations. Futures Commission Merchants are responsible for overseeing customer margin accounts. Margins are determined on

5780-418: The present time. Assuming interest rates are constant the forward price of the futures is equal to the forward price of the forward contract with the same strike and maturity. It is also the same if the underlying asset is uncorrelated with interest rates. Otherwise, the difference between the forward price on the futures (futures price) and the forward price on the asset, is proportional to the covariance between

5865-421: The price goes against them, the contract may involve both parties lodging as security a margin of the value of the contract with a mutually trusted third party. For example, in gold futures trading, the margin varies between 2% and 20% depending on the volatility of the spot market . A stock future is a cash-settled futures contract on the value of a particular stock market index . Stock futures are one of

5950-413: The production of electricity, as well as new information on the storage of electricity and natural gas consumption. Electric power In common parlance, electric power is the production and delivery of electrical energy, an essential public utility in much of the world. Electric power is usually produced by electric generators , but can also be supplied by sources such as electric batteries . It

6035-780: The quantities as vectors. Real power is represented as a horizontal vector and reactive power is represented as a vertical vector. The apparent power vector is the hypotenuse of a right triangle formed by connecting the real and reactive power vectors. This representation is often called the power triangle . Using the Pythagorean Theorem , the relationship among real, reactive and apparent power is: (apparent power) 2 = (real power) 2 + (reactive power) 2 {\displaystyle {\text{(apparent power)}}^{2}={\text{(real power)}}^{2}+{\text{(reactive power)}}^{2}} Real and reactive powers can also be calculated directly from

6120-404: The rate of risk-free return r . or, with continuous compounding This relationship may be modified for storage costs u , dividend or income yields q , and convenience yields y . Storage costs are costs involved in storing a commodity to sell at the futures price. Investors selling the asset at the spot price to arbitrage a futures price earns the storage costs they would have paid to store

6205-411: The required margin. ROM may be calculated (realized return) / (initial margin). The Annualized ROM is equal to (ROM+1) -1. For example, if a trader earns 10% on margin in two months, that would be about 77% annualized. Settlement is the act of consummating the contract, and can be done in one of two ways, as specified per type of futures contract: Expiry (or Expiration in the U.S.) is the time and

6290-473: The risk of price changes. Speculators, by contrast, seek to make a profit by predicting market moves and opening a derivative contract related to the asset "on paper", while they have no practical use for or intent to actually take or make delivery of the underlying asset. In other words, speculators are seeking exposure to the asset in long futures contracts or the opposite effect via short futures contracts. Hedgers typically include producers and consumers of

6375-521: The simple equation P = IV may be replaced by a more complex calculation. The closed surface integral of the cross-product of the electric field intensity and magnetic field intensity vectors gives the total instantaneous power (in watts) out of the volume: ℘ = ∮ area ( E × H ) ⋅ d A . {\displaystyle \wp =\oint _{\text{area}}(\mathbf {E} \times \mathbf {H} )\cdot d\mathbf {A} .} The result

6460-540: The size of rooms that provide standby power for telephone exchanges and computer data centers . The electric power industry provides the production and delivery of power, in sufficient quantities to areas that need electricity , through a grid connection . The grid distributes electrical energy to customers. Electric power is generated by central power stations or by distributed generation . The electric power industry has gradually been trending towards deregulation – with emerging players offering consumers competition to

6545-474: The speculator traded would have been saved during a time of surplus and sold during a time of need, offering the consumers of the commodity a more favorable distribution of commodity over time. The Dōjima Rice Exchange , first established in 1697 in Osaka , is considered by some to be the first futures exchange market, to meet the needs of samurai who—being paid in rice—needed a stable conversion to coin after

6630-444: The spot market, companies can trade natural gas on a continuous basis for the current day (within a day), one day, and two days in advance, as well as for the following weekend. Since the launch of 24/7 trading, EEX has also offered seamless trading with a minimum lot size of 1 MW (in addition to 10 MW contracts). Short-term gas quantities can be traded on the exchange for delivery in the market areas GASPOOL, NetConnect Germany (NCG), and

6715-563: The statutory publication requirements and implements the market participants' voluntary commitments. The platform was established by EEX and the four German transmission system operators and launched in October 2009. In 2011, the Austrian transmission system operator Austrian Power Grid AG joined the cooperation. EEX is in charge of the operation of the platform, which comprises plausibility checking, anonymization, aggregation, and publication of

6800-645: The technically improved Daniell cell in 1836, batteries have become a common power source for many household and industrial applications. According to a 2005 estimate, the worldwide battery industry generates US$ 48 billion in sales each year, with 6% annual growth. There are two types of batteries: primary batteries (disposable batteries), which are designed to be used once and discarded, and secondary batteries (rechargeable batteries), which are designed to be recharged and used multiple times. Batteries are available in many sizes; from miniature button cells used to power hearing aids and wristwatches to battery banks

6885-544: The term "maintenance margin", which in effect defines how much the value of the initial margin can reduce before a margin call is made. However, most non-US brokers only use the term "initial margin" and "variation margin". The Initial Margin requirement is established by the Futures exchange, in contrast to other securities' Initial Margin (which is set by the Federal Reserve in the U.S. Markets). A futures account

6970-424: The traditional public utility companies. Electric power, produced from central generating stations and distributed over an electrical transmission grid, is widely used in industrial, commercial, and consumer applications. A country's per capita electric power consumption correlates with its industrial development. Electric motors power manufacturing machinery and propel subways and railway trains. Electric lighting

7055-416: The underlying asset price and interest rates. For example, a futures contract on a zero-coupon bond will have a futures price lower than the forward price. This is called the futures "convexity correction". Thus, assuming constant rates, for a simple, non-dividend paying asset, the value of the futures/forward price, F(t,T) , will be found by compounding the present value S(t) at time t to maturity T by

7140-633: The world. By 1875 cotton futures were being traded in Bombay in India and within a few years this had expanded to futures on edible oilseeds complex , raw jute and jute goods and bullion . In the 1930s two thirds of all futures was in wheat. The 1972 creation of the International Monetary Market (IMM) by the Chicago Mercantile Exchange was the world's first financial futures exchange, and launched currency futures . In 1976,

7225-517: The year 2020, a total of 622 TWh was traded on the Power Spot Markets of EPEX SPOT (2019: 598 TWh). In the field of natural gas, the volume traded on the EEX amounted to 2,412 TWh, a slight decline of minus 5 percent compared with the previous year (2019: 2,546 TWh). The volume of trading in emission allowances amounted to 1,318 million metric tons in 2020 in total (previous year: 1,139 million metric tons). The spot market for electricity

#90909