News & events

2014-11-11

NASDAQ OMX Commodities presents first financial products for electricity market players

As of November 11, the derivatives exchange NASDAQ OMX Commodities will start trading in derivative instruments linked to electricity prices in the Lithuanian and Latvian bidding areas of the power market Nord Pool Spot. The power derivatives will enable the market players to hedge against electricity price deviations in power exchange and help manage the risk associated with price deviations in different bidding areas.
 
"Power derivatives to hedge against price differences in Lithuanian and Latvian bidding areas consists of two months, three quarters and even two years contracts.  These financial instruments help market players to handle uncertainty in the market and lower the level of risk.  This is an important step towards the development of a liquid power derivative market. The use of power derivatives by market players is expected to lead to a drop in electricity prices, and consumers will feel the benefit," said Daivis Virbickas, CEO and Chairman of the Board of the Lithuanian electricity transmission system operator Litgrid.
 
NASDAQ OMX Commodities offers Lithuanian and Latvian electricity markets players EPAD RIGA (Electricity Price Area Differential) contracts to hedge against differences between Lithuanian-Latvian and Nord Pool Spot system prices and the fluctuations of Nord Pool Spot system prices. 
 
Until now the derivatives exchange NASDAQ OMX Commodities has traded in financial instruments linked to electricity prices in Northern European countries, Estonia, Germany, the Netherlands, and the United Kingdom.  The derivatives offered for Lithuanian and Latvian bidding areas will be available for all market players and financial institutions.   
 
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