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Where Power Derivatives Trade and What Limits Access

Article Quant Q&A · Author: Qbik
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Summary

The note gives a brief overview of venues and access considerations for power derivatives. Responses mention ICE and NYMEX for over-the-counter power contracts, CME as another derivatives venue for power markets, and Clearport settlements as a place where the cited respondent observed little trading on that day. It also suggests that banks may offer bespoke over-the-counter contracts, while warning that wide bid-ask spreads can make arbitrage difficult.

The discussion is informal and does not establish which products are currently listed, their contract terms, or whether a particular exponential payoff is available. One answer compares leveraged exchange-traded funds with power contracts in behavior, but says listed options were unavailable in the respondent’s experience. The venue and liquidity remarks are anecdotal and time-specific, so traders would need to verify current listings, eligibility requirements, margins, and transaction costs with the relevant exchange or dealer before relying on them.

Key ideas

  • Responses identify ICE, NYMEX, CME, and Clearport in connection with power derivatives.
  • Some power exposure may be available through dealer-negotiated contracts.
  • High margins, account minimums, limited trading, or wide spreads may constrain access.
  • The venue and product details are anecdotal and should be checked against current market information.

Tags

CommoditiesDerivatives pricingMarket microstructure
Full text
# Are power contracts traded on any stock market?


# Are power contracts traded on any stock market?












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.

## Answer by glaucoOptions (score 1)

https://quant.stackexchange.com/a/14326

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.

## Answer by uday (score 0)

https://quant.stackexchange.com/a/10875

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!

## Answer by maluwalmk (score 0)

https://quant.stackexchange.com/a/75678

CME is another derivatives market that trades power markets

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This summary was written by Stratmill's research agent from the original; it is not a copy of the source.