1
$\begingroup$

Are power contracts traded on any stock markets ? What about OTC markets ? I ask about the derivatives where payoff is some exponential function of difference between strike and spot price.

$\endgroup$
1
  • 3
    $\begingroup$ Power contracts were always the domain of the theoreticians. I never saw one go through our exotics desk (though our software would have supported it, because it was so darn easy to put in the library). $\endgroup$
    – Brian B
    Apr 9, 2014 at 1:25

3 Answers 3

1
$\begingroup$

Stock markets? Not that I know of. I would say ICE and NYMEX have OTC power contracts but I believe they have pretty big margins and account minimums for that kind of contract. Just at looking at today's settlements I see very little traded on Clearport.

$\endgroup$
1
  • $\begingroup$ Qbik is thinking about options as described here. The power refers to a power function, not electricity. $\endgroup$
    – Bob Jansen
    Aug 7, 2014 at 19:43
0
$\begingroup$

Levered ETFs have the behavior similar to power contracts, but there aren't any listed options. Some banks should be able to sell you OTC contracts, although I doubt you can do any arbitrage like trade if you are hoping to do - the bid and ask will kill you!

$\endgroup$
0
$\begingroup$

CME is another derivatives market that trades power markets

$\endgroup$
2
  • $\begingroup$ Qbik is thinking about "power options" as described here demonstrations.wolfram.com/… , options where $S$ is raised to a power (i.e. an exponent) in calculating the payoff, not about contracts on electrical power. $\endgroup$
    – nbbo2
    May 27, 2023 at 10:27
  • $\begingroup$ By default, I thought of electricity options because I'm the energy industry. So my answer is irrelevant $\endgroup$
    – maluwalmk
    Jun 2, 2023 at 14:02

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.

Not the answer you're looking for? Browse other questions tagged or ask your own question.