ENERGY EXCHANGES
cheaper and offers more specialised which is why people you get people involved e.g. financial institu-
products.Belowaresometypicalcom- tions will come to the exchanges.”
ments from traders regarding the
benefits of OTC trading: “Yes, trading via exchanges will probably increase, but not neces-
sarily stronger than brokered OTC trading (as far as forward trading
“Lower costs of OTC and the ability to is concerned).”
design tailor-made products that are
not available on the exchanges.” “Yes, it’s an idea whose time has come. It has been slow to
“The main benefit of OTC trading is develop but there will be pressure in the market to see exchanges
the cost advantage and to an extent it operate better.”
is less strict on rules and regulations so “Yes, because credit is moving the focus – most energy companies
there is more flexibility.” are less credit-worthy than financial institutions.”
“OTC trading is important as a com- “Yes, because I think there will be a greater focus on credit, people
plement because traders have much will take credit more seriously and I think the increase could be very
better customer contacts and there are significant.”
tailor-made and specialised products.”
“Yes, if there are more consolidated exchanges with more products,
“The ability on the OTC market to with incentives to trade on exchanges rather than OTC. At the
negotiate prices.” moment there are no incentives to trade.”
“In gas, traded volumes are set to “Yes on some. Some exchanges may disappear and the trade will be
grow strongly but this will largely be taken up by others, where trading will take off. It won’t increase in 12
OTC. Exchanges will only get significant months, but it should in 5 years, so it probably will increase in the
volumes if they offer interesting prod- next 3 years.”
ucts that are not available OTC – e.g. a
day-ahead cleared price for gas.” “Yes, because it is a natural development of the market, more play-
ers are involved in it and these won’t want to have the infrastructure
Expanding Role of Exchanges that is needed for trading OTC.”
•
Traders believe that trading on both
exchange and OTC platforms will
increase significantly in the next
*ThesurveywassponsoredbyAPXinassociationwithEFETand
conductedbyMoffattAssociates,anindependentenergymarket
three years. Below are some typical
researchandbusinessstrategyconsultancybasedinLondon.
comments:
AversionofthisarticlefirstappearedinAPX’s
Quarterly Energy Viewpoints bulletin – Spring 2008.
“Yes, I think the main issue is the cred-
www.moffatt-associates.com
it issue. Trading on exchanges is safer
76 SEPTEMBER 2008 COMMODITIES NOW
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102