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Forward markets tools

Two forward markets tools are available – both are interactive dashboards focused on the trading of New Zealand electricity futures contracts. The first, hedging with base load futures, simulates trading using actual historical data for quarterly base load contracts. It provides a detailed breakdown of the trader’s financial position with the exchange for each day that the trade remains active. The second dashboard, strategically building a position, extends the first one and allows users to construct a position over time.

Both dashboards have a lot going on and make extensive use of tool tips and notes in an effort to make more transparent a topic that is inherently quite complex.

Hedging with base load futures

This tool allows users to simulate the hedging of electricity purchases in the wholesale electricity market by choosing how many New Zealand base load electricity futures contracts to purchase and when to purchase them. It then uses actual historical data from ASX to compute the daily cost of maintaining the purchased position. Taking account of spot prices then enables an ex post breakdown of all hedging cost components to be calculated and presented, culminating in the final net cost of the hedged purchases. In so doing, the ASX margin maintenance and settlement process is demonstrated.

Strategically building a position

Users of this tool can make selections from several parameters in order to adopt a strategy to build up a hedge position anywhere from six months to three years ahead of time. Actual historical data from both the physical spot market and the futures market is then used to report how the strategy plays out financially from a hedging perspective.

Latest tools discussions
vSPD-online: Getting started and fundamentals

Category  - Wholesale 8 months ago

How are outages modeled in vSPD?

Category  - Wholesale 12 months ago

New tool on EMI – Hedging with electricity futures contracts

Category  - Forward markets 18 months ago

GDX files for vSPD

Category  - Wholesale 18 months ago

Latest tools discussions
vSPD-online: Getting started and fundamentals

Category  - Wholesale 8 months ago

How are outages modeled in vSPD?

Category  - Wholesale 12 months ago

New tool on EMI – Hedging with electricity futures contracts

Category  - Forward markets 18 months ago

GDX files for vSPD

Category  - Wholesale 18 months ago