Ttf Month Ahead Definition
In addition, the spread between the first month`s forward price of the underlying asset and the spot price will generally be the narrowest and will continue to narrow until they converge at expiration. The use of one-month advance contracts requires an increased level of care, as the delivery date may expire shortly after purchase and the buyer or seller must actually receive or deliver the contracted goods. First-month contracts are often combined with month-end contracts to create schedule discrepancies. Backwardation and contango are terms used to describe the shape of a commodity`s futures curve. Backwardation occurs when the forward price of a commodity for each subsequent month is lower along the curve, resulting in an inverted futures curve. The spot price of futures, which is the first month`s price, will be higher than next month`s price and so on. This is usually the result of an interruption in the power supply of this product. In other words, backwardation occurs when the current price of a commodity is higher than the expected future price. First month contracts have an expiration date closer to the current date. With this in mind, they tend to be the most traded and liquid futures contracts for a given commodity or futures market. Normally, but not always, the previous month indicated is in the same calendar month.
The prices of the first month are generally those used when quoting the forward price of that security. Figure 1: TTF implied volatility in the first month (2012-18) Figure 1 shows the evolution of the implied volatility of the first month of the FTT options contract “to the money”. Futures contracts have different months of expiration throughout the year and many extend into next year. Each futures market has its own specific expiration order. For example, financial instruments such as Standard & Poor`s 500 e-mini futures or US Treasury bond futures use the quarterly expiry months of March, June, September and December. Commodity markets are loosely tied to their extraction, harvesting, or planting cycles and can have five or more months of delivery per year, and energy futures such as crude oil have monthly expiration dates of up to nine years. It is important to note that the expiration dates and the last day of trading are not identical. For energy in particular, contracts are no longer negotiated in the month preceding the month of expiry. Therefore, choosing the right expiration month for a trading strategy is very important. Contango refers to a normal futures curve for a commodity where the futures price is higher for each subsequent month along the curve. The spot price is lower than next month`s price and so on. This makes intuitive sense, as physical raw materials come with storage, financing, and insurance costs.
The longer it expires, the higher the cost. Simply put, contango is when the future price of a commodity should be more expensive than the spot price. High premiums for one-month call options are affected by contract illiquidity, but are consistent with the risk of immediate sharp price increases. The price of these call options reflects an insurance premium to protect against short-term gasoline price spikes. The month before, also known as the “near” or “spot” month, refers to the next expiration date of a futures contract. Contracts that have a later expiration date than first-month contracts are called return month or “distant month” contracts. It was founded in 2003 by Gasunie, is almost identical to the National Balancing Point (NBP) in the UK and allows gas trading within the Dutch gas network. TTF is operated by an independent subsidiary of Gasunie, Gasunie Transport Services B.V.[1], the gas transmission system operator in the Netherlands.
Wholesale of gas at the FTT is conducted primarily over the counter through inter-dealer brokers. Physical short-term gas contracts and gas futures are also traded and settled by the ICE-Endex Exchange (Amsterdam[2]) and through the PEGAS Exchange. FTT gas is traded in euros per megawatt hour. Argus подробно освещает логистику поставок нефти, нефтепродуктов, угля, СУГ, природного газа, СПГ, металлов и удобрений в различных регионах мира. Сервисы Argus предоставляют клиентам актуальную информацию о стоимости фрахта судов, перевалки грузов в портах, транспортировки энергоресурсов по трубопроводам и доставки различных видов грузов по железной дороге. Argus публикует котировки и аналитические обзоры по широкому перечню нефтепродуктов. We cover the gasoline, diesel, kerosene, marine fuel, base oils and other refined petroleum products markets in all regions of the world. Argus publishes bids for a wide range of fertilizers, including phosphate, nitrogen and potash. Our services provide information on fertilizer prices, production volumes and delivery routes to customers.
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