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Glossary

Additional Margin
If positions in futures and options can not be closed out to the final settlement price but to a for the ECC disadvantageous price, additional losses arise. The additional margin covers these losses. In general, these losses depend on the underlying's price movement. The maximal price movement expected in the underlying is called additional margin parameter.
Additional Margin Parameter
Parameter which describes the maximal expected price movement of the underlying in consideration of a certain confidence level. The additional margin parameter is used in the calculation of the additional margin.
American Option
An option which can be exercised on each day of trading until the last day of trading.
Ask
Sell order
Assignment
If an option is exercised, the clearing house assigns a sell position in the same option to the buy position executed in options by means of a drawing procedure.
At-the-money
An option with regard to which the market price of the underlying security equals the exercise price is at-the-money.
Auction
Form of trading for ascertaining the price and for matching of buy and sell orders to form transactions. During the auction all the orders in the order point are matched to form transactions at a specified point in time. Usually that price is established as the auction price at which the biggest quantity of contracts is bought and/or sold.

Balance Area
Energy account which the transmission system operator keeps for every user of the system in accordance to a balance area agreement. In the account feeding, withdrawals and the transfer of energy to other balance areas (schedule) are booked in order to establish the deviation in the energy balance of every user.
Balance Area Agreement
All contractual agreements between the transmission system operator and the grid user regarding the settlement of power and natural gas deliveries.
Balancing Area Responsible Party
Grid user as counterparty of a balance area agreement which is responsible for the settlement of balancing group deviations.
Base Load
Characterizes the type of load for the delivery of electricity or the procurement of electricity with a constant output over 24 hours of each day of the delivery period.
Batch processing
Daily vespertine process of the clearing house. It includes position keeping as well as calculation and posting of margins for all transactions that are cleared and settled by the clearing house.
Bid
Buying order
Block Order
Combination of up to 24 partial orders regarding hour contracts for power. The partial orders have to refer to different hour contracts of the same delivery day and of the same place of delivery (TSO). A block bid can be a buy order (all partial orders are buy orders) or a sell order (all partial orders are sell orders). All partial orders of block bids are either executed completely or they are all not executed completely.
Broker
Anglo-Saxon term for intermediaries who execute investment trades not on their own account but for their clients. At the EEX, brokers arrange OTC trades. The term broker has a different meaning at the EEX spot market than at the OTC market. At the EEX spot market, a designated broker is a service provider who provides the technical access to the EEX system for one or more trading participants who are allowed to trade at EEX and enters the orders into the system (market access).

Call
Call option. An option which authorizes the buyer to buy a specific number of the underlying security at the exercise price.
Call for additional cover
If the deposited margin of a Clearing Member or Non Clearing Member does not fulfil the requirements of the daily calculated margin (under funding) the Clearing Member or Non Clearing Member is requested for additional cover (margin call). Clearing members and Non Clearing Members have to fulfil the additional payment.
Carbix
Index for EU emission allowances which is calculated on each exchange day in an intra-day-auction on the EEX Spot Market at 10.30 am.
Cascading
Positions in year futures and quarter futures are fulfilled through cascading. On their last day of trading these futures are replaced with equivalent futures with shorter delivery periods.
Cash Settlement
An exclusive financial fulfilment of transactions is called cash settlement.
CDM
Clean Development Mechanism. CDM is a project based mechanism which permits the execution of emission reduction projects in developing countries and the use of emission credits from these projects (CER) to ensure compliance with Kyoto commitments. Emission credits from CDM projects increase the total global quantity.
CER
Certified Emission Reduction. CERs are emission credits generated by means of CDM projects. One CER corresponds to a carbon credit of one tonne CO2 equivalent. Since 2008 CERs can be credited up to a certain percentage of the total reduction liabilities of operating facilities within EU ETS.
Clearing
Financial and physical settlement of transactions as well as collateralisation of transactions
Clearing House
An institute which acts as a central counterparty for transactions (CCP). The clearing house organises the accounting of receivables and liabilities, the delivery of the transactions and the collateralisation of the transactions.
Clearing Member
Participant in the clearing procedure who has a clearing license. The clearing license is obtained by means of the conclusion of a corresponding clearing agreement with ECC. There are two forms of clearing membership: A general clearing license authorizes the holder to clear transactions on own account, customer transactions or transactions by Non-Clearing Members. A direct clearing license authorizes the member concerned to clear transactions on own account, customer transactions as well as transactions by affiliated Non-Clearing Members.
Close-out of a position
An open position is closed by the conclusion of an equal but opposite transaction. A long position can thus be closed by an offsetting short position, and vice versa. After close-out no receivables or liabilities remain from the transactions. The enforced closing of a position by a third party such as the clearing house or the exchange is frequently referred to as the closing out of an open position.
Collective account
Account of the clearing house kept at the German national register for EU emission allowances in which the EU emission allowances traded on the exchange are kept in trust by the clearing house.
ComXerv
Abbreviation for Commodity Exchange Service. The trading system on the EEX Spot Market for power.
Continuous Trading
Unlike in an auction, price formation in continuous trading is done during a given period of time in which transactions take place continuously. During the continuous trading, all orders in the orderbook are constantly tested on their feasibility. As soon as two orders are executable they will be matched immediately. Competing orders in the order book are prioritised by firstly price and then time.
Contract
Tradable standardized unit of an underlying. The contract specifications determine the arrangement of a contract, e.g. the contract volume and the maturity date of the delivery.
Control Area
Defined grid area with regard to which a transmission system operator is responsible for balancing. Control areas serve as places of delivery of power contracts.
Cross margining
Cross margining is a term for the offsetting of risks which opppose one another. The offsetting can be undertaken due to a high correlation of price movements. Cross margining allows for a reduction of margins paid by trading members who are actively trading various products on various markets.

Day-Ahead Market
Part of the spot market where a commodity is tradable one day before delivery.
DEHSt
German Emissions Trading Authority, competent national authority of the German Federal Environment Agency for the implementation of the market-based climate protection tools under the Kyoto Protocol. This authority keeps the national German register for EU emission allowances.
Delivery
The physical fulfilment of transactions is called delivery.
Delivery Margin
The delivery margin has to be furnished for net short positions in TTF Gas Base Load Month Futures before the beginning of the delivery phase and net short positions in futures on emission rights which are not covered through adequate physical emission rights on the respective clearing account prior to delivery. In both cases, risks of the seller as a result of a not or partially not executed physical delivery are covered.
Delta
The amount by which the option premium changes if the underlying security changes by one unit.
Derivatives
Collective term for futures and options
Derivatives market
Market on which futures and options are tradeable.

ECC
European Commodity Clearing AG. Central counterparty for all transactions effected on EEX.
Emissions trading
Emissions trading is a market based approach in order to achieve climate protection goals. The sale of emission allowances to a higher price than an emission reduction action would cost or the purchase of emission allowances in case of higher costs of emission reduction actions provides an incentive for companies to engage in emission trading. Due to the limited amount of allocated emission allowances evolves a market in which also companies without emission reduction liabilities take part (cap and trade system).
EPEX Spot
European spot exchange based in Paris. EPEX Spot is operated by EPEX Spot SE, a joint venture company founded by EEX AG and Powernext SA. The products traded on EPEX Spot are standard contracts for the physical delivery of electricity within the Austrian, French, German or the Swiss transmission systems.
EU ETS
EU Emission Trading Scheme - the emission trading system of the European Union launched in January 2005 as first international emission trading system. The first trading period of the EU ETS expired at the end of 2007, the second trading period takes place from 2008 until 2012.
EUA
EU Allowance. One EUA is the minimum trading unit in EU emissions trading. One EU allowance enables the owner to emit one tonne CO2 equivalent.
Eurex System
The Eurex System is an electronic trading and clearing system for futures and options markets. Eurex System is used on the derivatives markets of EEX.
European Option
An option which can only be exercised on the last day of trading.
Exercise
Declaration by the buyer of an option stating that he wishes to buy or sell the underlying security under the conditions specified in the options contract.
Exercise price
Synonym for strike price
Expiry Month Factor
In addition to the additional margin parameter, the expiry month factor is used for the calculation of the additional margin for net positions in physically settled month futures as soon as this future is in the delivery phase.

Final Settlement Price
The final settlement price is the price established at the end of the trading period.
Forward
A supply contract between a buyer and seller, whereby the buyer is obligated to provide delivery of a fixed amount of a commodity at a predetermined price on a specified date in the future. Payment in full is due at the time of, or following, delivery. This differs from a futures contract, where settlement is made daily.
Future
A future is an unconditional futures contract. A future is a binding contractual obligation, to buy (buyer of a future) or to sell (seller of a future) a predefined amount of an underlying value to a certain price at a specified time (delivery period) in the future. Futures contracts are traded exclusively on regulated exchanges and are settled on a daily basis on their current value in the market.

GUD
Abbreviation for Gasunie Deutschland. H-gas market area in Northern Germany. EEX offers spot and derivatives trading with natural gas contracts for this market area.

H-gas
In general there are two qualities of natural gas: L (low) and H (high). Because of the higher methane concentration (87 - 99 vol %) H-gas has a higher caloric value while L-gas possesses a lower methane concentration (80 - 87 vol %). On EEX H-gas can be traded.

Iceberg Order
Buy or sell order which is specified by means of its limit, total quantity and peak quantity. The Iceberg Order is placed in the order book in partial orders to the amount of the peak quantity. As soon as a partial order has been executed, a new partial order to the amount of the peak quantity is placed in the order book. This process is repeated until the total quantity of the Iceberg Order is executed.
Implicit volatility
The volatility taken into account in an option premium.
In-the-money
A call option (call), in the case of which the market price of the underlying security is above the exercise price, or a put option (put), in the case of which the market price of the underlying security is below the exercise price is in-the-money.
Initial Margin
The initial margin covers the risk from all spot market transactions settled via ECC.
Internal accounts
Inventory accounts of trading participants for EUA which are kept in trust by the clearing house. Changes in the inventory arising on account of delivery and acceptance, depositing in fiduciary safe custody and returning of allowances from fiduciary safe custody are booked on these internal accounts.
Intra-Day Margin
Additional margin which has to be deposited within a trading day due to a highly volatile market situation or due to a high amount of transactions.
Intra-Day Market
Part of the spot market on which the trading participants can trade a commodity up to one hour prior to the beginning of the delivery.
Intrinsic value
The intrinsic value of an option corresponds to the difference between the current market price of the underlying security and the exercise price of the option provided this entails a price advantage for the buyer. The intrinsic value is always zero or bigger than zero.

Limit order
Buy or sell order which is entered with a position limit; it is executed at said limit or at a better limit.
Long position
A long position is a deal of the buyer of a futures or options contract that is not yet fulfilled in parts or in its entirety. It constitutes thus an obligation for the buyer to purchase a certain good at a specified date in the future. Offset transaction: Short Position

Margin
A margin is a collateral which has to be deposited for market transactions like futures and options. The securities are furnished at the clearing house in cash or securities. Clearing members deposit the margins at the clearing house, non-clearing members deposit the margins at the respective clearing member. The clearing house ECC differentiates between five different types of margins: Initial Margin, Premium Margin, Additional Margin, Spread Margin and Delivery Margin.
Mark-to-Market
With the help of the mark-to-market procedure profits and losses from open futures positions, which are caused by price changes in the futures, are calculated on a daily basis. The changes in the value of the individual positions are established on the basis of the daily settlement prices. The settlement of these changes in value is carried out with credit notes or margin calls.
Market area
Term used in natural gas trading. A market area is operated by a grid gas company. The number of market areas is determined by physical restrictions and property lines in the natural gas industry. A market area serves as point of delivery of natural gas contracts. EEX offers natural gas trading for the market areas GUD and NCG.
Market Clearing Price
Synonym for auction price. The market clearing price corresponds to the intersection between the aggregated supply and demand curve.
Market Coupling
Market Coupling is a method to manage capacity congestions between adjacent power spot markets. In general this is designed as an implicit auction and requires a coordination of spot auctions of the exchanges involved.
Market Maker
A market maker is a trading participant who holds a bid and an ask order (quote) simultaneously for a minimum period of time on the exchange trading day. Market makers serve to ensure basic liquidity.
Market order
Buy or sell order which is entered without a price limit. The unlimited order is executed at every price.
Market order matching range
Price corridor around the last price traded, within which market orders in futures can only be executed.
Matching
Combining of performable contracts in the order book.
MCP
Shortcut for market clearing price
Mistrade
A transaction which was effected as a result of a misentry is called mistrade.

NCG
Abbreviation for NetConnect Germany. NetConnect Germany is a H-gas market area which covers the former market areas of bayernets and E.ON Gastransport. EEX offers spot and derivatives trading with natural gas contracts for this market area.
Nomination
The delivery of schedules to the transmission system operator or grid gas company is called nomination. Nomination is done by the clearing house ECC.
Non-Clearing-Member
Exchange participant who does not have a clearing licence. Instead of acting as a Clearing Member he takes part as a Non Clearing Member (NCM) in the clearing process. This requires the cooperation with a Clearing Member via an NCM agreement.

Open Interest
The Open Interest characterizes the number of all open positions in a specific futures or options contract at one point in time. It corresponds thus to the total number of futures contracts in a given market that have not yet been closed, delivered physically or executed via cash settlement.
Opening of a position
If a new position is created when a future or an option is bought or sold, it is referred to as the opening of a position.
Option
Binding contractual obligation. The right to buy (call option, call) or to sell (put option, put) a certain number of the underlying security at the exercise price on the exercise day.
Option Holder
Buyer of an option
Option premium
See option price
Option price
Price of an option. Synonym of option premium.
Option series
Call and put with the same characteristics with regard to the delivery period, maturity and exercise price.
Option Writer
Seller of an option
Order
Orders are binding buy or sell orders from trading participants.
OTC
Shortcut for over-the-counter. An OTC contract is a bilateral contract in which two parties agree on how a particular trade or agreement is to be settled in the future.
OTC clearing
Service offered by exchanges. OTC transactions which correspond in their contract specification to exchange transactions can be registered. In this case clearing and settlement of the OTC transactions will be done by the respective clearing house.
Out-of-the-money
A call option (call), in the case of which the market price of the underlying security is below the exercise price, or a put option (put), in the case of which the market price of the underlying security is above the exercise price is out-of-the-money.

Payment
Financial fulfilment of a trade
Peak Load
Characterizes the load type for the delivery or procurement of electricity at a constant load over 12 hours from 08:00 am until 08:00 pm on every working day (Monday to Friday) during a delivery period.
Phelix
Phelix means Physical Electricity Index. Calculated on a daily basis, the Phelix is the average price for base load (Phelix Day Base) and peak load (Phelix Day Peak) electricity traded on the EEX power spot market (market area Germany and Austria).
Physical fulfilment
EEX trading participants are able to combine the financial fulfilment of their futures positions (see cash settlement) with a 'physical fulfilment' on the spot market of the exchange by buying or selling the underlying of the future.
Point of delivery
Place for the delivery of the underlying in case of a physical delivery of a contract. The place of delivery is defined in the contract specifications. For electricity or natural gas the place of delivery is the zone of the respective transmission system operator.
Position
A position is a deal in the futures or options market that is not yet fulfilled in parts or in its entirety. It constitutes thus an obligation to fulfill the transaction at a specified date in the future.
Position limit
A position limit is the maximum number of derivatives contracts that may be held by one exchange participant or one customer for its own account. In derivatives trading, the position limits for each product can be defined by the Board of Management as the maximum total number of contracts purchased and sold. The definition of position limits ensures that trading proceeds in an orderly manner. In particular, it is intended to prevent individual exchange participants from acquiring disproportionately sized positions.
Premium margin
In the close-out process of options, losses (sell position) or profits (buy position) arise. The Premium Margin is a collateral which covers the costs of closing out at the settlement price. Profits are credited to the respective account. The losses and profits depend on the market price of the option.
Principle of most executable volume
The principle of most executable volume describes the method of setting the price in an auction. The price, which is established in accordance with the principle of most executable volume, is the price at which the highest volume can be combined with the lowest surplus.
Product
All futures and / or options contracts of the same underlying form a product. The futures contracts are defined by their maturity in addition. The option contracts are defined by the maturity, the option type (call or put) and the exercise price in addition.
Put
An options contract which authorizes the buyer to sell a specific number of the underlying security at the exercise price on the exercise day.

Quote
Simultaneous placing of bid and ask orders by a trading participant.

Register
A sort of deed book for EU emission allowances which is kept as a national register by every country. In Germany, this register is kept by the German emissions trading authority (DEHSt) at the federal environment office.

Safe custody
Only those emission rights can be traded which are kept in trust by ECC AG in its collective account at DEHSt.
Schedule
A schedule is an instruction to the transmission system operator (TSO) to book power or natural gas between two balance areas. Physical delivery of contracts is fulfilled by means of reporting of schedules to the TSO.
Settlement
Settlement is the financial and physical fulfilment of a transaction.
Settlement Day
Days on which the financial and/or physical settlement of the transactions is effected.
Settlement Price
Price for each individual futures and options contract which is established by the exchange on a daily basis. This price is applied in the final settlement.
Short position
A short position is a deal of the seller of a futures or options contract that is not yet fulfilled in parts or in its entirety. It constitutes thus an obligation for the seller to sell a certain good at a specified date in the future. Offset transaction: Long Position
Spot market
Market on which transactions regarding products are concluded and/or registered which are settled within a period of two settlement days. Settlement can take place immediately (intra-day), the following day (day-ahead) or two days ahead.
Spread
The range between best bid and best ask is called spread.
Spread Margin
If two future positions of the same underlying with different delivery periods (Future Spread Position) can not be closed out at the amount of the final settlement price but to a price which is disadvantageous for the ECC, additional close-out losses arise. The Spead Margin is a collateral which covers these close-out losses. These losses depend on the price movement of the respective underlying. The spread margin parameter describes the maximal expected movement of the price change between the respective base values in consideration of a certain confidence level.
Stop Limit Order
Buy or sell order which is placed in the order book as an limited order as soon as the stop entered is reached in trading.
Stop Market Order
Buy or sell order which is placed in the order book as an unlimited order as soon as the stop entered is reached in trading.
Strike Price
The price at which the underlying security is bought or sold upon exercising of an option.

Glossary

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Hauptnavigation

Glossary

Additional Margin

Additional Margin Parameter

American Option

Ask

Assignment

At-the-money

Auction

Balance Area

Balance Area Agreement

Balancing Area Responsible Party

Base Load

Batch processing

Bid

Block Order

Broker

Call

Call for additional cover

Carbix

Cascading

Cash Settlement

CDM

CER

Clearing

Clearing House

Clearing Member

Close-out of a position

Collective account

ComXerv

Continuous Trading

Contract

Control Area

Cross margining

Day-Ahead Market

DEHSt

Delivery

Delivery Margin

Delta

Derivatives

Derivatives market

ECC

Emissions trading

EPEX Spot

EU ETS

EUA

Eurex System

European Option

Exercise

Exercise price

Expiry Month Factor

Final Settlement Price

Forward

Future

GUD

H-gas

Iceberg Order

Implicit volatility

In-the-money

Initial Margin

Internal accounts

Intra-Day Margin

Intra-Day Market

Intrinsic value

Limit order

Long position

Margin

Mark-to-Market

Market area

Market Clearing Price

Market Coupling

Market Maker

Market order

Market order matching range

Matching

MCP

Mistrade

NCG