Articles by Risk Staff
Online trading moves forward
Online energy trading seems to have a bright future, despite the two biggest players – Dynegy Direct and EnronOnline – leaving the market, finds Catherine Lacoursière
Var too far
The energy industry has shown tremendous commitment to value-at-risk (Var) methodologies. But use of Var has been misguided, as James Ockenden discovers
Keeping an eye on the long-term
Brett Humphreys discusses the problems with standard credit risk limits and proposes limits that may work better
The price of good information
The accounting scandals across the US – particularly at Enron – have led to demands for more independent market data in the energy sector. Who’s providing it, and is it meeting the industry’s needs? Kevin Foster reports
Risk and reward at the speed of light: a new electricity price model
Samuel Bodily and Michel Del Buono propose a new electricity price model. The mean-reverting proportional volatility model matches important characteristics of power price dynamics where others, such as geometric Brownian motion, fall short
A credit boost for traders
Clearing houses are emerging as a crucial function of energy trading exchanges. John Kennedy explains their importance in terms of a firm’s credit rating
High oil and gas prices enhancing credit quality
The ‘war premium’ is propping up oil and gas prices and oil firms’ balance sheets. But debt levels and quality of assets are still king. Catherine Lacoursière reports
How Japan got it covered
The fast-growing Japanese weather derivatives market is unique in both its product diversity and the range of small business end-users it serves. But where are the big players? Rob Dwyer reports
European info squall to clear
At last, weather data is starting to become available in the European market, spurring growth in the weather derivatives market there. Paul Lyon reports
Canada opens new pastures
Alberta’s Agricultural Financial Services Corp came to Aon with a special need to hedge precipitation risk, and Aon rose to the challenge. The transaction uses a unique index. Catherine Lacoursiere reports
A change in atmosphere
The overall condition of the weather derivatives market is in flux, but there are still plenty of financial institutions who don’t mind a mixed forecast. By Navroz Patel, with additional reporting by Paul Lyon
Aquila’s troubles could break emerging markets risk
Confusion at the weather derivatives operations of energy giant Aquila is having a knock-on impact on the development of weather products in emerging markets around the world. Paul Lyon reports
Getting a grip on the market
Innogy, a US energy company, is well placed to take advantage of the rewards that weather trading can offer. Eurof Thomas finds out the secret of its success
Exchanges eye weather
New exchanges are entering the weather risk arena despite Liffe’s failure to successfully market its European weather futures. But while the US exchanges appear bullish, European entrants are treading cautiously. Paul Lyon reports
Getting technical with crude
Energy market specialist GlobalView Software takes a look at a range of technical trading indicators and what they reveal about the world oil market
What’s the worst that could happen?
Brett Humphreys discusses how using a standard credit value-at-risk measure may be misleading for credit risk decisions