Market Design

Nodal Exchange auctions offer participants in North American organized locational electricity markets the ability to enter transactions that mirror actual physical positions. Currently, Nodal Exchange offers contracts in the ISO-NE, NYISO, PJM, MISO and CAISO markets, with ERCOT and others to follow. Contracts at commercially significant hubs, zones, and nodes in these designated markets are eligible for trading on both Nodal Exchange’s auction and bilateral platforms.

Nodal Exchange conducts one auction per business day. All orders submitted in time for the auction are eligible for the auction, and no participant has knowledge of other participants’ orders. The Nodal Exchange auction engine matching algorithm has been designed to economically optimize the system, and can match the components of spread and aggregate orders with components of other orders. Nodal Exchange expects the processing of the auction orders to last for approximately 2 hours. As all auction trades are cleared by LCH.Clearnet, participants do not need to know their counterparties, nor worry about counterparty credit risk issues.

Nodal Exchange also has a bilateral platform. Brokers and participants can submit negotiated trades formed from Nodal Exchange contracts to this platform, and Nodal Exchange submits the trade to LCH.Clearnet for clearing.