Australian Electricity – New Listed Inter-Commodity Spreads – Additional Listed Contract Months
Mon 30 Jun 2014
As per ASX Notice 0656.14.06, ASX is set to introduce new inter-commodity spreads on ASX 24 for the Australian electricity Base Load futures contract to $300 Cap futures contract from trade date 7 July 2014.
ASX will now extend the inter-commodity spread pairs from the first eight (8) quarters to all Base Load and $300 Cap contracts.
The Base Load contract will be the ‘dominant’ leg for the spread pricing. The spreads will appear as per below:
- GN – BN
- GQ – BQ
- GV – BV
- GS – BS
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 GNZ4BNZ4 inter-commodity spreads. You are buying 5 lots of the BN contract and selling 5 lots of the GN contract.
2. When selling 5 lots of the GNZ4BNZ4 inter-commodity spreads. You are selling 5 lots of the BN contract and buying 5 lots of the GN contract.
What do I need to do and by when?
Customers and vendors should ensure the additional 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 7 July.
The new spreads are available for customer and vendor testing in the ASX 24 External Test Environment.