Carbon Emission via IG.

[squaregains]

See IG are offering a market in Carbon Emissions - any view / traders / good sources of info on this market place ?

 

[danfreek]

How bizzare, It doesn't look like the price changes much, it hasn't changes in over an hour. It would be very interesting to find out about it though if anyone does have any info.

 

[Robertral]

How bizzare, It doesn't look like the price changes much, it hasn't changes in over an hour. It would be very interesting to find out about it though if anyone does have any info.

these things are very volatile.....10day hist vol of 113%, thats pretty volatile in my book pal

 

[squaregains]

Robert - where can you get price / analytics for this instrument from? Thanks

 

[danfreek]

these things are very volatile.....10day hist vol of 113%, thats pretty volatile in my book pal

yeah, sorry, I didn't mean exactly what I said

I meant that it doesn't seem to move very often. I really should think about what I'm typing.

 

[squaregains]

The output of some quick research I did just now - looks interesting given the vols.

What the Product is all about:

http://www.europeanclimateexchange.com/index_flash.php


Traded through IPE:

Historical pricing

http://www.theipe.com/historical/eod.asp?sp=eod_ecxcfif&date=07/26/2005


An extract from a FAQ - Taken from their site:


Q: The price of EUAs has risen meteorically in the past few months. Any comments?

A: Because of the uncertainty on what the allocations are, and problems of registries, people are unlikely to sell what they’re uncertain of having. Lack of sellers is probably one reason why price has been going up recently. I cannot comment on what the price of carbon should be, but I believe that at the moment it is being driven more by political drivers than fundamental.

Over time the price of carbon should tend towards the switching cost between coal and natural gas for electricity producers; and it should be the cost of capital to shift from an inefficient process to an efficient process. This is known as the marginal abatement cost, i.e. for an installation what would it cost to reduce emissions by between 5% to 10 % etc. I am not very sure what that price is, but it would approximate the difference between the price of coal and the price of natural gas, which determines how much carbon is emitted per KW of electricity.


My question -> Anywhere to get free delayed charts for some basic TA?

 

[Robertral]

The output of some quick research I did just now - looks interesting given the vols.

What the Product is all about:

http://www.europeanclimateexchange.com/index_flash.php


Traded through IPE:

Historical pricing

http://www.theipe.com/historical/eod.asp?sp=eod_ecxcfif&date=07/26/2005


An extract from a FAQ - Taken from their site:


Q: The price of EUAs has risen meteorically in the past few months. Any comments?

A: Because of the uncertainty on what the allocations are, and problems of registries, people are unlikely to sell what they’re uncertain of having. Lack of sellers is probably one reason why price has been going up recently. I cannot comment on what the price of carbon should be, but I believe that at the moment it is being driven more by political drivers than fundamental.

Over time the price of carbon should tend towards the switching cost between coal and natural gas for electricity producers; and it should be the cost of capital to shift from an inefficient process to an efficient process. This is known as the marginal abatement cost, i.e. for an installation what would it cost to reduce emissions by between 5% to 10 % etc. I am not very sure what that price is, but it would approximate the difference between the price of coal and the price of natural gas, which determines how much carbon is emitted per KW of electricity.


My question -> Anywhere to get free delayed charts for some basic TA?

Bloomberg terminal

 

[TWI]

This market has potential to be huge. I have been meeting with energy desks from a number of banks over the past few weeks and the feeling is that this market is going to grow very quickly. Already the amount of activity has surpassed expectations and the fact IG are listing that and not other European energy markets that have been around for years is indicative of this sentiment.
EU has a target to cut emissions by 8% and have 22% of power production from renewables by 2010 there will have to be a huge change in generation mix over the coming years and emissions will figure in the portfolio of not only energy sector businesses but equity funds in the utilities sector and energy spec books.

 

[squaregains]

interesting - I am sure volume will grow the question is where will the price go..

 

[TWI]

Price will go up on the whole. It has to as the quotas which are granted to fossil plants will be reduced each year. Question is how far and how fast. At €25 where is is already Gas prices in above coal, at €50 wind prices and €100 solar prices in.
There have apparently been some dodgy deals done where east european dirty plants have been bought up and shut down just for their quotas. Screw those who might have no lights or heating anymore, this is about making money.

 

[Pippppin]

you can always rely on those East Europeans....

 

[carbondotcom]

Emissions

The output of some quick research I did just now - looks interesting given the vols.

What the Product is all about:

http://www.europeanclimateexchange.com/index_flash.php


Traded through IPE:

Historical pricing

http://www.theipe.com/historical/eod.asp?sp=eod_ecxcfif&date=07/26/2005


An extract from a FAQ - Taken from their site:


Q: The price of EUAs has risen meteorically in the past few months. Any comments?

A: Because of the uncertainty on what the allocations are, and problems of registries, people are unlikely to sell what they’re uncertain of having. Lack of sellers is probably one reason why price has been going up recently. I cannot comment on what the price of carbon should be, but I believe that at the moment it is being driven more by political drivers than fundamental.

Over time the price of carbon should tend towards the switching cost between coal and natural gas for electricity producers; and it should be the cost of capital to shift from an inefficient process to an efficient process. This is known as the marginal abatement cost, i.e. for an installation what would it cost to reduce emissions by between 5% to 10 % etc. I am not very sure what that price is, but it would approximate the difference between the price of coal and the price of natural gas, which determines how much carbon is emitted per KW of electricity.


My question -> Anywhere to get free delayed charts for some basic TA?

The reason why 2005-7 emissions prices haven't collapsed is because german utilities are gaming the market in order to justify higher power costs. Look to the 2008 futures contracts for Phase II of the EU-ETS. Phase I is "long" by 100 million credits. Just go on Bloomy and correlate using the G function the price of the EU-ETS 2006 contract with Cal 07 [look at EMIT <GO> and [VOLT <GO>]

 

[TWI]

I did one trade in emissions this year where I took a small long before the countries came in with their 05 emissions figures. It ended up costing me €200k. I have not been back since then. I do not consider it a real market. Conclusion is that this has been an effective way for corporates to make a lot of money for nothing. All the prvate utilities made a killing on their too large allocated quotas which were free. The no brainer was to get long utility stock and stay the hell away from emissions.

 

[carbondotcom]

I did one trade in emissions this year where I took a small long before the countries came in with their 05 emissions figures. It ended up costing me €200k. I have not been back since then. I do not consider it a real market. Conclusion is that this has been an effective way for corporates to make a lot of money for nothing. All the prvate utilities made a killing on their too large allocated quotas which were free. The no brainer was to get long utility stock and stay the hell away from emissions.

Sorry to hear you got burned.......I went short after the bounce from the crash ....Phase I certificates will get crushed once the Poles go on-line....NBP/Power/Emissions/New ICE coal contract basket looks like a good bet once ya have liquidity.

 

[TWI]

Yep, I am waiting still for somebody to offer decent liquidity in financial swaps for these products. ICE is still creating too much execution risk when you have no access to OTC.

 

[inggscap]

I know this thread is old now but anyone been trading carbon since the last post? I'm doing it on IG.