Download Energy Markets: Price Risk Management and Trading by Tom James PDF

By Tom James

Expense chance administration and buying and selling. strength hazard administration specialist, Tom James, does it back. His newest booklet is a well timed addition to the swiftly constructing power buying and selling markets. This ebook might be on each strength dealer, threat supervisor and company planer's table. it's a simple learn as Tom is going into nice aspect to provide an explanation for the intricacies of this marketplace and its numerous specified parts. - Peter C. Fusaro, Chairman, worldwide swap affiliates Inc., Best-selling writer and effort specialist This good and useful consultant is vital for these looking an figuring out of trade in strength derivatives. past in basic terms informative, this hand booklet for the practitioner information the finer issues of using derivatives as instruments for price-risk administration. No strength buying and selling table may be with out it. - Ethan L. Cohen, Senior Director, application and effort know-how, UtiliPoint overseas Inc. strength markets are even more risky than different commodity markets, so probability mitigation is extra of a priority. power costs, for instance, may be plagued by climate, geopo9litical turmoil, alterations in tax and felony structures, OPEC judgements, research' stories, transportation matters, and provide and insist - to call quite a few components. Tom James's publication is a pragmatic consultant to assessing and coping with those hazards. it's a must-read for senior administration in addition to danger and monetary professionals.- Don Stowers, Editor, Oil & gasoline monetary magazine This e-book is the main finished on expense probability management-centric efforts. It presents the reader with a tangible adventure of derivatives in present day capital and effort markets. The breadth and scope of the passages are great, in that either constructed and constructing international locations' power markets are thought of and examples utilized. superb learn! - Rashpal Bhatti, advertising and marketing supervisor, power buying and selling Asia, Enron/BHP Billiton Tom James has simplified the intricacies of a really complicated marketplace. during this new marketplace of "hot" commodities, he has been in a position to supply a clean path to people who are new to the strength markets and a fantastic assessment for people that are good pro. he covers every thing in the oil marketplace from A to Z during this booklet and does it good. Coming from a monetary heritage myself, it's essential eventually discover a publication that could carry a greater knowing to the sector of power commodities. - Carl Larry, vice chairman Citi strength worldwide Commodities

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Extra resources for Energy Markets: Price Risk Management and Trading

Sample text

During any trading day the exchange may add one or more strike prices nearest to the last price listed. S. cent per barrel Maximum daily price fluctuation Unlimited 59 Daily margin All open contracts are marked-to-market daily. Option premium Due to futures-style margining, option premiums are not paid/received at the time of the transaction. Rather, margins are paid/received every day according to the changing value of the option and the total value to be paid/received is only known when the position is closed (by an opposing sale/purchase, exercise or expiry).

Exercise and automatic exercise ICE Brent Crude options can be exercised into Brent Crude futures contracts. ICE options contracts are of American-style exercise, allowing the buyer to exercise call and/or put options up to 17:00 hours on any business day (except on expiry day) during the life of the contracts, by giving an exercise notice to the London Clearing House in respect of such options. On expiry day the buyer has up to one hour after the cessation of trading to exercise his options. At that time LCH will automatically exercise all 60 options that are in the money on behalf of the member unless instructed otherwise by the member.

The practical mechanics of an EFP transaction EFPs can be effected between two futures market participants — a long and a short hedger — provided there is a physical market transaction between the parties. For example, a futures market long (a buyer) would take delivery of crude oil from a futures market short (the seller) with whom the EFP is conducted. In this transaction, the buyer’s hedge is liquidated, as is the seller’s, and the actual transfer of crude oil occurs between the parties, not via the exchange.

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