Energy Trading Glossary

TTF and Henry Hub — the European and US benchmark gas hubs. JKM is the Northeast Asia LNG spot marker.

Regasification and liquefaction — the terminal processes converting LNG to gas and gas to LNG; capacity access is a traded commodity in itself.

DES and FOB LNG — delivered ex-ship versus free on board cargoes, which determines who controls the vessel and destination.

Spark spread — the margin between power price and the gas cost of generating it, adjusted for efficiency.

Day-ahead, intraday and balancing markets — sequential markets that settle expected and actual delivery.

Capacity market — payments for availability rather than energy delivered.

PPA — power purchase agreement, a bilateral long-term offtake used heavily to finance renewables.

Tolling agreement — paying a fee to convert one commodity into another, common in LNG and refining.

Guarantees of origin and carbon allowances — traded environmental instruments attached to energy delivery.

Shape and profile risk — the difference between a flat hedge and an actual delivery curve.

Basis risk — exposure between the hedged hub and the physical delivery point.

Weather and outage risk — the demand and supply shocks that dominate short-term energy pricing.