Derivatives trading activity in the growing power trading markets have seen trading volumes increase as volatility in global energy markets spills over into power instruments. Leipzig headquartered, European Energy Exchange (EEX) reported trading volumes for the month of July. The German trading venue saw its metrics reach a record high for 2014.
The volumes generated in power trading on the EEX continue to develop positively, in July EEX achieved 149 TWh, the highest volume on the Power Derivatives Market this year.
Furthermore, in the exchange’s derivatives trading unit, Phelix Future, the venue saw a sharp increase in its market share of volumes, hitting a new record high at 29%. In July 2013, the market share was only 18%, thus showing an 11% rise in activity on a year-on-year basis. The exchange reports this data to the London Brokers’ Association (LEBA) every month.
Steffen Köhler, pictured, Chief Operating Officer of EEX, commented about the July figures in a statement: “If we exclusively consider the cleared volume in German power trading, EEX accounts for a share of more than 96 percent.”
Energy instruments have expanded from the traditional crude oil and natural gas products to include C02 and coal futures, among others. The EEX is one of the most liquid venues in Europe. It offers a wide range of energy asset classes, trading volumes are represented in terawatt-hour per year, TWh.
EEX continues its Pan-European expansion, in addition to Phelix futures, which focuses on the German and Austrian market, the exchange also offers financial futures for France and Italy as well as physical futures for Belgium and the Netherlands.
Carbon emissions have been a key talking point on the global agenda as environmental economics play a pivotal role among developed world leaders. Carbon pricing is a method of reducing global warming emissions, the instrument charges those that emit carbon dioxide (CO2) for their emissions.
FX and CFD brokerage firms entered the energy CFD market offering traders access to energy derivatives. Leading multi-asset broker, Saxo Bank, launched a range of CFDs on Carbon Emissions in 2009. The firm stated that it will offer investors the opportunity to trade in emissions starting at the equivalent of 25 metric tonnes on a yearly basis. Alpari UK and IG also offered the CFD instrument.