Energy trading markets have developed rapidly since the growth of oil spot markets in the late 1970s. The liberalization of natural gas and electricity markets across Europe has led to the emergence of gas and power trading markets in many countries. Coal trading has also developed in recent years and the trading of carbon emissions has grown following the creation of the EU Emissions Trading Scheme.
This section provides an introduction to the energy markets and the different commodities traded, setting a foundation for the later exploration of energy trading and Back Office issues.
A range of different financial instruments have been developed for trading energy commodities.
This module explains the key concepts of commodity trading and features of different contract types. The specific contracts and trading markets for each energy market are described.
This module puts energy trading operations into context, showing how they fit into the life cycle of a deal. It describes the structure of a trading organisation and explains the roles and responsibilities of the various different functions. It follows the life cycle of a deal, describing the main tasks that are carried out at each stage and explains the key operating principles. It also identifies common problems that can arise.
All business is characterised by risk. However, there are certain risks that are integral to the energy markets.
This module considers the issues relating to risk, in particular the price risk driven by the inherent volatility of energy prices, and examines means of managing energy price risk. Risks such as delivery risk, operational risk, credit risk and regulatory risk are also explored.
The Back Office has a crucial role in maintaining the operations of an energy trading business.
This module examines the principles of Back Office operations and concisely introduces the main tasks of Back Office staff. While different trading businesses have varying approaches to elements of Back Office operations, this module provides a simple explanation of the practicalities of common Back Office task and processes.
Although there are many similarities between energy commodity markets, there are also significant differences. This module uses flow-charts to illustrate the key tasks and processes for a range of energy market deals for different commodities and types of financial instrument.
This module looks at the following:
Master Agreements provide a vital role in managing the process of energy trading. By trading under a Master Agreement counterparties do not need make complicated legal and commercial arrangements for each deal, and can instead concentrate on the deal itself. The relevant Master Agreement covers a wide range of areas including credit, netting, confirmation and settlement to simplify and standardize the trading process.
This module provides an overview of the key principles and practices of Master Agreements, as well as providing examples from the main Master Agreements in use for energy trading.
Over recent years regulation of energy trading has become increasing
complex and wide-ranging, with the introduction of a series of, sometimes
overlapping, regulations, including REMIT, EMIR and MiFID. Compliance
with these regulations is a vital part of the modern energy trading
This module provides an overview of the key energy trading regulations and regulatory roles, as well as a guide to the probable impact of these regulations on energy trading operations. Key areas covered include the overall context of regulation, as well as detailed application of REMIT and EMIR to European energy markets.
Once you have paid subscription fees to EFET, MJMEnergy Ltd will contact you with log-in information.