Straddle short the simultaneous sale of a put and a

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Straddle (short) the simultaneous sale of a put and a call with different maturities, with a view that volatility will decrease. Strangle Buying call and buying put with the same maturity. Strike Price the price at which an option holder has the right to buy or sell an underlying commodity and/or financial derivative. Sub-bituminous Coal a type of coal whose properties are between lignite and bituminous coal. Its primary use is power generation. Swap an exchange of streams of payments over time ac- cording to specified terms of the contract. Generally one party agrees to pay a fixed price in return for receiving a floating price from another party. If the floating price rises, the buyer of the swap receives a payment from the seller of the swap equal to the cur- rent market price minus the fixed price of the swap. If the floating price falls, the buyer of the swap pays the seller of the swap the floating price of the swap minus the current price of the swap.
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- 11 - Swaption Volatility Swaption an option to purchase (call swaption) or sell (put swaption) a swap at some future date. T Take-or-Pay a clause in an energy (natural gas, electricity, crude oil) supply contract which provides that a minimum quantity of energy be paid for, whether or not delivery is accepted by the purchaser. Therm Unit of heat energy equal to 100,000 British thermal units (Btu). Theta the rate of change of the value of an option with respect to time. Throughput the volume of energy flowing through a pipeline, refin- ery or terminal. Time Value the time component in a premium for an option. typ- ically the time value of an option declines as it moves closer to expiry. Tolling Arrangement an arrangement whereby a party moves fuel to a power generator and receives kilowatt hours (kWh) in return for a pre-established fee. Under this contractual arrangement, raw materials or intermediate products stream from one company to the production facility of another company in exchange for the equivalent vol- ume of finished products and payment of a processing fee. Tolling Fee a fee paid for use of electric generation assets used to convert fuel to power. Transmission the network of high voltage lines, transformers and switches used to move power from generators to the distribution system. also used to interconnect differ- ent utility systems and independent power producers together into a synchronized network. transmission is considered to end when the energy is transformed for distribution to the consumer. Transparent Pricing transparent pricing relates to the access to available information on the trading of commodities and finan- cial assets. Good transparency allows the public and other market participants to see the range of the transaction prices, the transaction volumes, and the prices and volume available for transactions. Turnaround, Refinery scheduled events wherein an entire process unit is taken offline for an extended period for revamp and/or renewal. U Unconventional Gas natural gas that cannot be produced using current technologies. Upstream the part of the energy value chain focused on the ex- ploration and production of crude oil and natural gas.
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