Various electricity ﬁnancial/physical instruments are traded on the exchanges and over the counters. Most of the electricity futures and options on futures are traded on the NYMEX. A large variety of electricity derivatives are traded among market participants in the OTC markets, including forward contracts, swaps, plain vanilla options, and exotic options like spark spread options, swing options, swaptions and structured transactions.
TROT Power Products provides possibilities for a different mechanism with effective hedging with lesser risk coupled with the funding possibilities for the power projects. It opens the doors for power derivatives to even retail investors with this hedge-cum-investment product.
TROT Power Derivatives
First time a standard, freely tradable retail product in power trading
One TROT Power Product represents 100 kWh of tradable power
The products are sold in electronic form and all transaction are on-line transactions
Freely tradable on TROT e-trade platform
Your any TROT product holdings can be your margin
Backed by secured payment gateway tie-up and ‘Clearing House’ services
TROT Derivative Contracts
Volatility of power rates influenced by changing demand & supply factors and the input costs provides an ideal ground for TROT Power Derivatives.
TROT Power Product structuring is designed to directly reflect changes in the power rates into the selling rates of the Products.
Power selling rates are no more static or government controlled. Different tariffs are provided depending on the consumer class (residential, commercial, industrial, ..) and units of the power consumed. The charge are fixed and variables. Further, the power subsidies are offered to certain class of consumers.
TROT Power derivatives are based on the variable charges i.e. Energy Charges, for the power consumed by general consumers.
Power derivatives are of major two types :
Power Consumer Derivatives
Power Trading Derivatives - an extension of the power trading mechanism and functioning like any other electricity derivatives.
Various financial and physical TROT derivative products more or less in line with the electricity derivatives will be offered shortly.
Role of trotrealty.com
It provides a secured platform for the derivative transaction backed by Clearing House support through its global TROT e-Trade Platform assuring :
Transparency of the transactions backed by well defined ‘Business Rules’
Global reach - any country; any currency
Governing body of Power sector, legal, accountancy, IT and finance experts
TROT Power Derivatives will be launched subject to certain legal and regulatory compliances.
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