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Bulls vs Bears: energy trading terms you need to know

homecustomer help centre help and advice glossary of trading terms

Energy industry and market trading terminology can be confusing if you’re unfamiliar with all the acronyms and phrases, so we’ve created this guide to help you make sense of some of the common abbreviations and expressions.

If you need further help in understanding how any of these terms apply to your energy strategy, you can contact us or get in touch with one of your account management team.


Base load
The baseload (also base load) on a grid is the minimum level of demand on an electrical grid over a span of time. Power plants that do not change their power output quickly, such as large nuclear plants, are generally called baseload power plants.

A falling market.

A bid stipulates the price the potential buyer is willing to pay, as well as the quantity the potential buyer will purchase, for that proposed price.

Brent crude
A trading classification of crude oil that serves as one of the two main benchmark prices for purchases of oil worldwide. It is used to set the price of two-thirds of the world’s internationally traded crude oil supplies.

A strengthening market.


Contracts across the curve
Refers to all products that are traded within the gas or power market.

Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. A type of fossil fuel, crude oil can be refined to produce usable products such as gasoline, diesel, and various other forms of petrochemicals.


Dark spread
The dark spark spread is the difference between the wholesale market price of electricity and its cost of production using coal generation.

The day-ahead market is a financial market where market participants purchase and sell a commodity for the following day.


The U.S. Energy Information Administration (EIA) is a principal agency of the U.S. Federal Statistical System responsible for collecting, analysing, and disseminating energy information to promote sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment.

The European Union Emissions Trading System is the world’s biggest emissions trading market, accounting for over three quarters of international carbon trading. The system works by putting a limit on overall emissions from covered installations and is reduced each year.

European API2 Coal
Contracts are financially settled based upon the price of coal delivered into the Amsterdam, Rotterdam, and Antwerp region in the Netherlands. The contract is cash settled against the API 2 Index published in the Argus/McCloskey Coal Price Index Report.


Far Curve
This is the portion of the forward curve that starts from the end of the Front Season covering all remaining tradable periods.


Henry Hub
The Henry Hub is a distribution hub on the natural gas pipeline system in Louisiana, USA and is used as a benchmark price for America’s LNG, which dictates if LNG cargoes are delivered to Europe and Asia.


Interconnector (IUK)
A physical, bi-directional natural gas pipeline between the UK and Europe, crossing the North Sea between Bacton Gas Terminal in England and Zeebrugge in Belgium. The construction was completed in 1998 to facilitate energy trading in the UK and European gas markets.


Liquidity refers to the ease with which a commodity can be bought and sold without affecting its market price.

LNG is the acronym for liquefied natural gas that is cooled down to liquid form to make it easier and safer for non-pressurised storage and to be transported around the globe. After arriving at its destination, is then warmed up and can be stored prior to entering the system.

LNG Vessel
A LNG Vessel is a ship that is designed for the transport of liquefied natural gas in its chilled tanks.


Notional Balancing Point, commonly referred to as the NBP, is a virtual trading location for the sale and purchase and exchange of UK natural gas.


An offer stipulates the price the potential seller is willing to accept, as well as the quantity the potential seller will sell, for that proposed price.

Organization of the Petroleum Exporting Countries. The current OPEC members are the following: Algeria, Angola, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, the Republic of the Congo, Saudi Arabia (the de facto leader), the United Arab Emirates and Venezuela.


Peak demand
Peak demand is the highest electrical power demand that has occurred over a specified time period.

Power curve
This refers to all tradable periods within Near and Far Curve.


A quarter refers to one-fourth of a year and is typically expressed as “Q1” for the first quarter, “Q2” for the second quarter, and so forth.


A season refers to a six-month calendar season such as Summer (April – September) or Winter (October – March).

Spark spread
The spark spread is the difference between the wholesale market price of electricity and its cost of production using natural gas.

System Imbalance Pricing
The System Sell Price (SSP) and the System Buy Price (SBP) are the ‘cash-out’ prices or ‘imbalance prices’ that are used to settle the difference between contracted generation or consumption and the amount that was actually generated or consumed in each half hour trading period. There is only one imbalance price for electricity, SSP=SBP.


A commercial unit of heat, a Therm is the unit of measurement for natural gas.


Wider energy complex
Refers to the European carbon and coal markets and the Brent crude market.