Ask

Buy side in the order book.

Assignment (of an option)

If an option is exercised, the clearing house assigns a depositor of securities to the holder of the option through a "drawing of lots" procedure.

At-the-money

An option is “at-the-money” if the price of the underlying security equals the exercise price.

Auction

An auction is a market mechanism in which multiple buyers and/or sellers simultaneously submit bids or orders, and a price and traded volume are determined based on fixed rules.

Back-End

The central trading system is called the back-end of the exchange. The system is responsible for matching supply and demand and process these in accordance with specific execution rules.

Balance area

A balance area is a virtual energy volume account for power or natural gas maintained by a balance area coordinator and records feed-ins, withdrawals and traded volumes. Balance areas are managed by transmission system operators (TSO) for power, and gas transmission operators for natural gas. The account is managed by the balance area coordinator who is responsible for any imbalances in the balance area.

Balance area agreement

A balance area agreement is a standardised, regulatory contract that defines the rights and obligations between the balance area coordinator and the relevant transmission system operator (TSO) in the power market or the gas transmission operator in the natural gas market.

Balance area coordinator

The balance area coordinator is the market participant who manages a balancing area and is responsible for maintaining its balance. The balance area coordinator ensures that the amount of electricity or gas fed into and withdrawn from the balance area is balanced.

Base load

Base load refers to the load profile of power deliveries with a constant output over 24 hours of every day of the delivery period.

Bid

Buy side in the order book.

Broker

A broker is a neutral intermediary who matches buy and sell orders for energy products (e.g. power, natural gas, GOs) between market participants, particularly in over-the-counter (OTC) trading.

Call option

An option granting the buyer the right to buy a certain number of the underlying security at the exercise price.

Cascading

Positions in year, season and quarter futures are replaced by cascading with futures having a correspondingly shorter delivery period.

Cash settlement

The financial fulfilment of future contracts is referred to as cash settlement.

Clearing process

Clearing refers to the financial and physical settlement of transactions that are completed at the exchange or registered through the exchange.

Clearing house

This is a body which steps into the process chain between the buyer and seller in the capacity of the central counterparty. The clearing house ensures the conclusion of the clearing process.

Clearing member

A participant in the clearing process with a clearing license. The clearing license is obtained through the conclusion of a corresponding clearing agreement with ECC. There are two forms of clearing memberships: A general clearing license authorises the holder to clear transactions for its own account and to clear customer transactions or transactions by Non-Clearing Members. A direct clearing license authorises the member concerned to clear transactions for its own account and to clear customer transactions as well as transactions by affiliated Non-Clearing Members.

Closing

Transaction to close an existing position on the derivatives market.

Continuous trading

Continuous trading is a form of trading designed for continuous price setting and the automated matching of buy and sell orders. All incoming orders are continuously checked for executability in the order book. When a matching buy and sell orders are found, they are executed immediately. Competing orders are prioritised according to the price-time priority principle, whereby the better price takes precedence and where prices are equal, the earlier time of receipt is decisive. 

Contract

Tradable standardised unit of an underlying asset. The contract specifications determine the design of a given contract, e.g. the contract volume and the maturity date of the delivery.

Control area

Defined power grid area with regard to which a transmission system operator (TSO) is responsible for balancing. Control areas serve as places of delivery for power contracts.

Current Data

The “Current data” package for end-of-day information products provides access to the market data for the current and the previous year.

DEHSt

The German Emissions Trading Authority, the national authority of the German Federal Environment Agency responsible for the implementation of the market-based climate protection tools such as emission trading. This authority maintains the German national register for EU emission allowances.

Delayed data

Delayed data comprises trading data for individual trades of the different spot and derivatives markets which are provided with a delay of 15 to 20 minutes, however, not end-of-day data.

Delivery

Delivery comprises the physical or contractual fulfilment of transactions.

Delta

The ratio between a change in an option premium and the change in the value of the underlying asset.

Derivatives

Collective term for futures and options, that means products that are traded on the derivatives market.

Derivatives Market

The dderivatives market is a market in which transactions are concluded with delivery and settlement at a future date, although the price is fixed today. Under MiFID II, a transaction is classified as a derivatives contract if settlement takes place more than two trading days after the contract is concluded. This clearly distinguishes the derivatives market from the spot market, where delivery and payment take place within two trading days at the latest. 

ECC AG

The European Commodity Clearing AG (ECC AG) is the central clearing house for commodities in Europe. ECC AG provides clearing processes for the EEX Group exchanges and further partner exchanges.

EEX Market Data Circular

The EEX Market Data Circular informs customers of news regarding the Info products. Subscribe to the EEX Market Data Circular in our newsroom.

End-of-Day Data

End-of-day data comprises the trading data of the different spot and derivatives markets from the end of the trading day.

EPEX SPOT SE

The European Power Exchange, EPEX SPOT SE, operates the markets for physical short-term power trading in more than 20 European countries. EPEX SPOT SE is a member of EEX Group.

EU-ETS

EU Emission Trading Scheme - the emission trading system of the European Union, which was launched as the first multinational emissions trading system in 2005 and is globally considered as the pioneer for globally emerging emissions trading systems. Currently, the fourth EU-ETS trading period is in progress (2021 until 2030).

EUA

EU Allowance - One EUA is a certificate that authorizes the owner to emit on tonne of CO2 equivalent.

Eurex System (T7)

The Eurex System is an electronic trading system used for certain EEX spot and derivatives markets.

European Option

An option which can only be exercised on the last day of trading.

Exercise price

The exercise price of an option is the price at which the underlying security is bought or sold upon exercising of the option.

Final settlement price

The final settlement price is the definitive settlement price at which an EEX financial power future is finally settled upon expiry of its delivery period. It forms the basis for the final financial settlement between the buyer and seller of a future and upon expiry replaces all previously used daily settlement prices.

Financial settlement

Financial settlement refers to the procedural completion of a transaction in which all financial obligations arising from a contract are fulfilled, in particular through payment, netting or cash settlement, without physical delivery of goods necessarily being required.

Front-end

The front-end is the trading software that the user sees and operates. Through the front-end, users can, amongst other things, enter, amend and delete orders and view market data (prices, order book, volumes). It connects the trader to the exchange’s electronic trading system (back-end). Exchange participants have the option of using custom front-ends or software from other providers (ISVs).

Future

A future is the contractual obligation to buy (buyer of a future) or sell (seller of the future) a specified quantity of an underlying security at a specified price during a specified period (delivery period). Futures contracts are exclusively traded on regulated exchanges and settled on a daily basis at the current market price.

GO – Guarantee of Origin

GO is an abbreviation for Guarantees of Origin. A Guarantee of Origin is a certificate that verifies the method of generation of one megawatt-hour of electricity from renewable sources.

Historical data

In end-of-day products, the “historical data” package comprises 2-month access to historical market data up to and including the previous year.

Iceberg order

An iceberg order is an order in which only a small portion of the total quantity is visible in the order book, whilst the majority remains hidden. Once the visible portion has been executed, the next portion appears automatically until the entire order has been filled.

Implicit volatility

Implicit volatility is a measure of the market’s expected future price fluctuations of an underlying security over the duration of an option. It is derived from current option prices and is therefore forward-looking.

In-the-money

A call option (call) is “in-the-money” if the price of the underlying asset is above the exercise price. A put option (put) is “in-the-money” if the price of the underlying security is below the exercise price.

Info-Product

Info-Products comprise processed market data granting the user electronic access to data for products on the spot and derivatives market established on the exchange.

Internal accounts

Inventory accounts of exchange participants for EUA which are kept in trust by the clearing house. Changes in the inventory arising on account of purchases and sales, 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 high volume of transactions.

Intraday market

This is a sub-market of the spot market on which power contracts are traded very short-term – on EPEX SPOT up to 0 minutes before delivery.

Intrinsic value

The intrinsic value of an option is the amount the option would be worth if it were exercised immediately. It is calculated as the positive difference between the current price of the underlying security and the exercise price (strike). If this difference is negative, the intrinsic value is zero.

ISV

Independent Software Vendor – An ISV offers software solutions for trading. EEX cooperates with a large number of ISVs to provide customers with broad market access.

Limit order

Buy or sell order which is entered with a price and executed at said price or at a better price.

Long position

A long position refers to an open position involving a claim or right to acquire an asset under a futures or options contract, where the contractual obligation has not yet been fulfilled in full or in part. In case of futures, the buyer commits themselves to take delivery of the underlying asset at a fixed price and at a future date, or to fulfil the obligation financially. With options, the buyer acquires a right, but not an obligation: a long call grants the right to sell the underlying asset, in each case under the agreed contractual terms. The opposite position is the short position.

Margin

Margins are securities deposited for transactions or positions that are executed with the clearing member or clearing house.

Mark-to-market

Mark‑to‑market (MTM) refers to the ongoing valuation of open positions at the current market price. MTM is applied to certain options and to all futures contracts. Under this method, gains and losses are calculated and recorded regularly (usually daily) on the basis of the current settlement price. The initial purchase price is irrelevant.

Market area

A market area is usually operated by a gas transmission system operator. In Germany, the gas market area is operated by a market area manager. The number of market areas is determined by regulatory, physical and ownership-related requirements.

Market coupling

Market coupling is a process employed to efficiently manage grid congestion between adjacent power spot markets. This is done with the help of implicit auctions of grid capacities. In order to achieve this, the spot auctions of the participating exchanges must be coordinated.

Market maker

A market maker is an exchange participant who holds both a buy and a sell order (quote) in the order book for a minimum period during the trading day. Market makers help to ensure basic liquidity in the order book.

Market order matching range

The market order matching range refers to the price range in the order book within which a market order may be executed.

Mistrade

A transaction which resulted from an incorrect entry when entering an order is called a “mistrade”.

nEHS

This acronym stands for the German National Emissions Trading System and refers to the German system under which companies must purchase allowances for CO2 emissions derived from by fossil fuels. The nEHS covers the heating and transportation sectors. Since 2021, EEX has served as the trading platform for the nEHS on behalf of the German Federal Environment Agency.

Nomination

The forwarding of schedules to the transmission system operator (TSO) for power or grid gas company is called nomination.

Non-clearing member

Exchange participants that do not have a Clearing License and which had entered into a contract with a Clearing Member in order to participate in trading on the Exchange.

Open interest

The Open Interest refers to the total of all derivatives contracts which have been opened (i.e. not yet settled) at a given point in time. The Open Interest (gross) published by EEX considers all opened  positions regardless if a position has been closed with a counter trade.

Opening of a position

When a future or an option is bought or sold to increase stock, this is referred to as “opening of a position”.

Option

An option is the contractual right to buy (buy or call option) or sell (sell or put option) a specified volume of an underlying security at a specified price at a predetermined future point in time.

Option premium

The terms ‘option price’ and ‘option premium’ refer to the same figure: the market price of an option. The term ‘option price’ is used in a more neutral or technical sense, whereas ‘option premium’ emphasises the payment from the buyer’s perspective (or the return of the seller/writer). There is no difference in meaning. 

Option series

An option series comprises all options of the same type (call or put) on the same underlying security with the same strike price and expiry date.

Out-of-the-money

A call option (call) is referred to as being “out-of-the-money” if the price of the underlying security is below the exercise price. A put option (put) is out of the money if the price of the underlying security is above the exercise price.

Peak load

This refers to a load profile for power deliveries with a constant output over twelve hours between 8am and 8pm each day during the delivery period.

Physical fulfilment of financial power future (Future-to-Spot)

The Future-to-Spot Service is a joint service provided by EEX and EPEX SPOT  to enter bids in the corresponding EPEX SPOT day-ahead auction according to the participants' respective position in an EEX power futures product. This service is available for trading participants simultaneously admitted to participate in the EEX power futures market and the EPEX SPOT power spot market.

Place of delivery

Place for the delivery of the underlying asset for the physical fulfilment of the trades. The place of delivery is laid down in the contract specifications. In the case of power these are the electricity grids of the respective transmission system operators (TSOs); in the case of natural gas, the gas grids of the respective gas transmission operator; in the case of EU Allowances, the EU Union Registry operated by the DEHSt; and in the case of Guarantees of Origin, the French Power Guarantees of Origin registry.

Position

A position in a futures or options contract is a number of contracts, that are not yet fulfilled.

Position limit

A position limit is the maximum number of contracts that may be held by one exchange participant or one customer for its own account.

Primary Market Auction

Emission allowances are issued to the market for the first time in primary market auctions. Since 2010, EEX has been active as a service provider in this field and is the leading European platform for primary market auctions.

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.

Put option

An options contract which authorises the buyer to sell a specific number of the underlying securities at the exercise price.

Real-time Data

Real-time data comprises trading data regarding individual trades or order books in the different spot and derivatives markets which are provided in real time and/or with a minimum delay.

Regulatory indices

Regulatory indices which EEX provides to the customer in the form of Info products and which are based on the regulatory specifications.

Schedule

In the power and gas market, a schedule refers to the time-resolved report of planned energy volumes that a balance area coordinator submits to the relevant system operator on behalf of their balance area.

Secondary Market

In contrast to the primary market, where EUA allowances are first issued, the secondary market is where EUA allowances that are already in circulation are traded.

Settlement

Settlement comprises the financial, physical and contractual fulfilment of a trade.

Settlement price

Daily market price of a future or options contract which is established by the exchange and used for its daily settlement and risk assessment.

Short position

A short position refers to an open obligation arising from a futures or options contract, where contractual settlement is still pending in whole or in part. In the case of futures, the seller undertakes to deliver the underlying asset at a fixed price and at a future date, or to settle the contract financially. With options, the obligation depends on the type of option: - A short call creates an obligation to sell the underlying asset, - a short put creates an obligation to buy the underlying asset, both with the condition that the option buyer exercises their right. The opposite is called long position

Spot market

The spot market (or cash market) is a market in which transactions are concluded for delivery and payment in the short term. Under MiFID II, a transaction is classified as a spot transaction if settlement takes place no later than two trading days after the contract is concluded. This clearly distinguishes the spot market from the futures market, where delivery and settlement are deferred beyond this period.

Spread

The range between best ask and best bid is called spread.

Stop Market Order

A stop market order is initially placed outside the order book and is only activated once the specified stop price is reached or breached; from that point onwards, it is entered into the order book as a standard market order and executed at the next best available price.

Tick

Smallest unit by which the price of a future or of an option can change.

Time Spread

A time spread order is a combined order in which two contracts of the same underlying asset are bought and sold simultaneously, differing only in their expiry dates.

Trade confirmation

Confirmation of the conclusion of a trade and, concurrently, of the execution of an order.

Trade registration

A service which enables exchange participants to register transactions concluded over the counter (OTC transactions) on the exchange, whereby clearing and settlement are carried out by the clearing house.

Trading day

The days when trading takes place, as specified by the respective exchange.

Trading participant

Company which is licensed by the exchange as an exchange participant in Spot and/or Derivatives trading.

Transparency Data

Generation data from different market areas, which are published on the EEX Transparency Platform.

Transmission system operator (TSO)

Transmission System Operator – TSOs are responsible for operating the power transmission systems within a given delivery area.

Underlying

The subject matter of a futures or options contract is referred to as the "underlying asset". The underlying can be the delivery of a commodity (power, natural gas, emission allowances), but also an index (e.g. EGSI) or - in the case of options - a future.

Volatility

The higher the volatility, the greater the upward and downward price fluctuations in the market.

Writer

The seller of an option is also referred to as the "writer".