WatersTechnology Library

Nodal Exchange

Nodal Exchange is the first commodities exchange dedicated to offering locational (nodal) futures contracts and related services to participants in the organized North American power markets. Nodal Exchange builds on the success of the existing Regional Transmission Organization (RTO/ISO) Day Ahead and Real Time markets by allowing its Participants to trade cash-settled, fully standardized futures contracts in a cleared market, enabling market Participants to effectively manage basis and credit risk. Nodal Exchange's auction and OTC trade platforms, cleared through LCH.Clearnet, provide enhanced basis and credit risk management and produce the forward price transparency and transaction liquidity needed in the North American power markets.

Nodal Exchange's cleared OTC trade platform allows Participants and brokers to submit negotiated transactions to Nodal Exchange for clearing. On the Nodal Exchange auction platform, Participants submit orders for matching by the auction engine and clearing through LCH.Clearnet. To facilitate market liquidity, the auction engine is capable of matching across a wide range of order types - including outright energy at a single location, spreads between locations or over time, and aggregates of time periods. In order to avoid counterparty risk, all auction transactions and Nodal Exchange OTC trades are cleared by LCH.Clearnet.

In its auctions, Nodal Exchange offers on-peak and off-peak power contracts for monthly terms, with expiries of up to a forward 68 months, at commercially significant hubs, zones and nodes in the following organized electric markets: ISO-NE, NYISO, PJM, MISO, ERCOT, and CAISO. Nodal Exchange also offers a Henry Hub natural gas contract in the daily auctions.

Power and natural gas contracts are also available through Nodal Exchange's cleared over-the-counter (OTC) trade platform.

In the future, Nodal Exchange intends to further expand its product offerings and also extend its platform to other market regions in the US and Canada.