Australian Electricity - New listed Inter-regional spreads
Mon 11 Aug 2014
ASX 24 - Inter-regional spreads - Base Load Quarter and Strip Futures contracts
As per ASX Notice 0872.14.08 effective from trade date 1 September 2014, ASX is set to introduce new inter-commodity (inter-regional) spreads on ASX 24 for the NSW, VIC, QLD and SA Australian Electricity Base Load Quarterly (B) and Strip Futures (H) contracts.
The inter-commodity spreads will cover all contract maturities.
Customers can enter spread limit orders quoting the price differential between the 2 regions. The spreads will appear as per below with the second leg as the dominant contract for pricing purposes.
- BN - BQ
- BV - BN
- BS - BV
- HN - HQ
- HV - HN
- HS - HV
When trading the inter-commodity spread:
- Buying the spread means buying the 2nd leg (dominant contract) and selling the 1st leg.
- Selling the spread means selling the 2nd leg (dominant contract) and buying the 1st leg.
Examples:
1. When buying 5 lots of the BNZ4BQZ4 inter-commodity spreads. You are buying 5 lots of the BQ contract and selling 5 lots of the BN contract.
2. When selling 5 lots of the BNZ4BQZ4 inter-commodity spreads. You are selling 5 lots of the BQ contract and buying 5 lots of the BN contract.
For further information on Inter-commodity spreads on ASX Trade 24 including general rules and pricing of inter-spreads please click here.
What do I need to do and by when?
Customers and vendors should ensure the additional listed spreads are reflected in their respective systems. To allow trading limits to be set for these products, customers and vendors should enable spreads for the relevant underlying contracts prior to trade date 1 September 2014.
The new spreads will be available for customer and vendor testing in the ASX 24 External Test Environment from trading date 18 August 2014.
If you have any queries please don't hesitate to contact us on 1800 330 101 or email info@asxenergy.com.au.