Overview

Nodal Exchange offers on-peak and off-peak power contracts at commercially significant hubs, zones and nodes in the following organized electric markets: ISO-NE, NYISO, PJM, MISO and CAISO. In the future, Nodal Exchange will extend its platform to other market regions in the United States and Canada, including ERCOT. All Nodal Exchange contracts can be traded in the weekly auction and 88 locations can be traded in the daily auctions. Bilaterally negotiated trades composed of any Nodal Exchange contracts are also accepted for clearing daily.

Benefits of Nodal Exchange

Granular Contracts
Nodal Exchange offers futures contracts on ~1,800 hubs, zones and nodes in the RTO/ISO markets. The auction format allows Nodal Exchange the ability to accept trades in as little as 1 MW increments at commercially significant nodal, zone and hub locations on the physical grid.

Trading Flexibility
Auction order types can include: outright power at a node, locational spreads between two nodes, calendar spreads, and aggregate time periods (strips). Individual contracts are offered for the current month of trading through prompt month plus eleven, creating a rolling set of 13 months of expiries for all contracts available for trading. In addition, for all 88 locations available for trading in our daily auctions, contracts are available for an additional 36 months forward, creating a rolling set of 49 months of expiries. Market Participants representing small loads, including demand providers or individual generators, as well as market makers and other holders of large portfolios are able to participate in the auctions and address their individual business requirements.

Credit Risk Management
One of the major advantages Nodal Exchange offers to its Participants is the full clearing of all trades through its Central Counterparty (CCP): LCH.Clearnet. LCH.Clearnet is the leading independent clearing house, serving major international exchanges and platforms, as well as a range of over-the-counter (OTC) markets. It clears a broad range of asset classes including: securities, exchange traded derivatives, energy, freight, interbank interest rate swaps and euro and sterling denominated bonds and repos. With its broad reach, experience, and large capital base, LCH.Clearnet allows Nodal Exchange Participants to concentrate on the market itself rather than on counterparty or credit risks.

Price Discovery and Market Liquidity
Forward price discovery and liquidity in today's power markets are limited to what is available at the hubs and can be extrapolated from the OTC bilateral trade market. Nodal Exchange auctions and cleared bilateral trades provide superior price discovery and market transparency.

Product Innovation
Nodal Exchange's flexible auction format allows for the rapid introduction of additional products. Nodal Exchange works with market Participants to develop products that meet the needs of the market and can leverage an efficient and time-proven auction format.